Bitcoin has experienced a price drop again after a short increase above the $72,000 limit on April 8. This price drop is believed to be due to a number of factors, which undoubtedly present a bearish outlook for the economy. flagship crypto.
Inflation figures are expected to be good
The March Consumer Price Index (CPI) figures are expected to be released on April 10. Some market experts to predict that the report will show an increase in headline inflation. This could lead to the Federal Reserve taking a hawk-like attitude on interest rates, which negatively impacts the price of Bitcoin and the broader crypto market.
This would explain why Bitcoin’s price has fallen lately as crypto investors remain on the sidelines CPI report. However, if inflation numbers turn out favorably, it could restore investor confidence in the economic situation and provide a much-needed bullish outlook for the crypto market.
Given that January and February inflation numbers exceeded expectations, it is also necessary to highlight what last month’s above-expectation numbers could mean in the long term. So far, the Fed has kept rates steady at around 5.3%, and at the start of the year there was even optimism that rate cuts could happen sometime this year.
However, with inflation remaining well above the Central Bank’s target of 2%, there is a growing feeling that at some point they could be forced to take drastic action. That is ultimately not good for the price of Bitcoin, especially considering various crypto analysts gave bullish forecasts partly based on their assumption that there would be several rate cuts this year.
Spot Bitcoin ETFs are in the red again
The Discover Bitcoin ETFs have also contributed to Bitcoin’s recent downturn. These mutual funds experienced net outflows on April 8 and 9, leading to a significant Bitcoin dump on the market. This outflow came mainly from Grayscale Bitcoin Trust (GBTC)which recorded an outflow of $303.3 million And $154.9 million on April 8 and 9 respectively.
Meanwhile, the other Spot Bitcoin ETFs have not registered impressive inflows during this period, showing that their demand has decreased. For context, 6 out of 10 Spot Bitcoin ETFs (excluding GBTC) recorded zero inflows on April 9, while 5 out of 10 recorded zero inflows on April 8. iShares Bitcoin Trust (IBIT) from BlackRock also registered a relatively low inflow of $21.3 million that day.
At the time of writing, Bitcoin is trading around $69,300, down more than 2% in the past 24 hours, according to data from CoinMarketCap.
BTC price loses $70,000 | Source: BTCUSD on Tradingview.com
Featured image from Vietnam Insider, chart from Tradingview.com
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