36

Bitcoin (BTC) has experienced a sharp decline, falling over 4% in the past 24 hours to around $58,000, erasing much of the previous week’s gains. This drop has triggered losses across the broader cryptocurrency market, with major tokens like Ether (ETH), Solana (SOL), Cardano (ADA), BNB Chain (BNB), and Ripple’s XRP also seeing declines.

Impact of U.S. Economic Data on Crypto

The recent sell-off in Bitcoin followed the release of the July U.S. Consumer Price Index (CPI) figures. The CPI increased by 2.9% year-on-year, marking the first time since 2021 that inflation has dipped below 3%. Despite a late recovery in traditional markets like the NASDAQ and S&P 500, Bitcoin continued to decline, highlighting its sensitivity to U.S. economic data.

What you need to know about today's CPI data:

It's promising to see that inflation is under 3%, for the first time in years

YoY: 2.9% increase vs. 3% increase expected
MoM: 0.2% increase, matching expectations
Core YoY: 3.2% increase, matching expectations
Core MoM: 0.2%… pic.twitter.com/tMlOPoGE9r

— Kim (@kimtalkscrypto) August 14, 2024

According to K33 Research, crypto prices have become “highly sensitive” to economic indicators, with investors favoring stability over riskier assets like cryptocurrencies. As a result, some traders are predicting a further drop in Bitcoin’s price, potentially reaching as low as $55,000 in the near term.

Potential for a Bitcoin Rebound

Despite the current downtrend, there are signals that Bitcoin could rebound soon. Alex Kuptsikevich, a senior market analyst at FxPro, suggests that if data supports the Federal Reserve’s easing of monetary policy, it could trigger a bullish reversal. This could see Bitcoin rise to $66,000, overcoming its short-term downtrend.

A New Downturn in the Crypto Market
Market Picture
The cryptocurrency market retreated 2.9% over the past 24 hours to $2.08 trillion from levels near $2.15 trillion, which had been resistance for the past ten days. Despite moderate optimism in equities following the inflation… pic.twitter.com/hib0DNldpE

— FxPro (@FxProGlobal) August 15, 2024

ETF Movements Reflect Market Sentiment

The U.S.-listed spot Bitcoin exchange-traded funds (ETFs) saw significant net outflows of $81 million on Wednesday, ending a brief two-day positive streak. Grayscale’s GBTC led the outflows with $56 million, while Fidelity’s FBTC and other major ETFs also experienced losses. However, some ETFs, like Franklin Templeton’s EZBC and BlackRock’s IBIT, managed to secure a cumulative $6 million in net inflows.

Yesterday the Spot #Bitcoin ETF saw over $81.4m outflows! pic.twitter.com/0YkNEMWfjD

— Crypto Rover (@rovercrc) August 15, 2024

Ether (ETH) ETFs performed better, with $10 million in net inflows over three days. BlackRock’s ETHA recorded $16 million in inflows, while Grayscale’s ETHE saw $16 million in outflows, demonstrating a mixed sentiment in the crypto ETF market.