Bitcoin has once again faced a price decline after briefly surpassing the $72,000 mark on April 8. This recent dip in price can be attributed to various factors that paint a bearish outlook for the flagship cryptocurrency. One significant factor contributing to this decline is the impending release of the March Consumer Price Index (CPI) data on April 10. Market experts anticipate that the report will reveal an increase in overall inflation, potentially prompting the Federal Reserve to adopt a hawkish stance on interest rates. Such a move could have adverse effects on Bitcoin’s price and the broader crypto market, explaining the recent downward trend as investors adopt a cautious approach ahead of the CPI report.
Should the inflation figures in the upcoming report be unfavorable, it could further erode investors’ confidence in the economic landscape, amplifying the bearish sentiment in the crypto market. Notably, previous inflation data from January and February exceeded expectations, raising concerns about the long-term implications of consistently surpassing projected figures. The Federal Reserve has thus far maintained interest rates at around 5.3%, with some optimism earlier in the year suggesting the possibility of rate cuts. However, persistent inflation above the central bank’s target of 2% has sparked speculation about the need for drastic measures in the future, a development that could negatively impact Bitcoin’s price. Analysts who previously predicted a bullish market based on anticipated rate cuts may need to reassess their forecasts in light of these evolving circumstances.
Another factor contributing to Bitcoin’s recent decline is the underperformance of Spot Bitcoin ETFs, leading to net outflows on April 8 and 9. The Grayscale Bitcoin Trust (GBTC) notably recorded significant outflows of $303.3 million and $154.9 million on the respective days, signaling decreased demand for these investment funds. Similarly, other Spot Bitcoin ETFs have struggled to attract inflows during this period, with a notable portion recording zero to minimal inflows. For instance, 6 out of the 10 Spot Bitcoin ETFs (excluding GBTC) saw zero inflows on April 9, while 5 out of 10 recorded the same on April 8. The lackluster performance of BlackRock’s iShares Bitcoin Trust (IBIT), which only saw a modest inflow of $21.3 million, further underscores the waning investor interest in these products.
As of the latest data available, Bitcoin is trading at approximately $69,300, representing a decline of over 2% in the past 24 hours, as reported by CoinMarketCap. This downward trend reflects the prevailing market sentiment influenced by the aforementioned factors, signaling a challenging period for the cryptocurrency in the near term. The chart from Tradingview.com highlights the price movement of BTCUSD, illustrating the recent price drop from the $70,000 level.
It is essential to note that the information provided in this article is for educational purposes only and does not constitute investment advice. As with any investment, trading or holding assets such as Bitcoin carries inherent risks, and individuals are encouraged to conduct thorough research before making any financial decisions. The opinions expressed in this article are not reflective of NewsBTC’s stance on investment strategies, and readers should exercise caution when navigating the volatile cryptocurrency market.