Bitcoin (BTC) started Thursday’s session above $68,000 but soon found itself as low as $64,600 by late afternoon UTC hours. This resulted in the world’s largest cryptocurrency by market cap giving up gains it made the previous day following the US Federal Reserve’s announcement that dollar interest rates would remain unchanged in March.
Swiss Central Bank Hiking Interest Rates and Larger Outflows From ETFs Causes BTC to Decline
Experts anticipate that BTC’s weak price action was probably due to the resurgence of the US dollar despite higher-than-expected inflation readings and the Swiss National Bank announcing a surprise move to cut interest rates by 25 basis points.
In an X post, macro analyst Michael Kao noted that the Swiss central bank’s move was perhaps in anticipation of other key global central banks deciding to start lowering their interest rates before the Federal Reserve.
At the same time, the group of 10 spot Bitcoin exchange-traded funds (ETFs) notched its largest three-day outflow since the funds began trading on January 11, 2024, according to Bloomberg data.
So far this week, the investment funds backed by Bitcoin recorded over $740 million in net outflows. The $1.4 billion in outflows from just the Grayscale Bitcoin Trust (GBTC) and the slower rate of inflows into BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) – the second and third-largest spot Bitcoin ETFs in the market – were the contributing factors.
Bitcoin Remains in an “Overbought” Position, Says JPMorgan Analysts
Strategists at JPMorgan suggest that Bitcoin is still in an overbought position, predicting that the apex cryptocurrency could decline further leading up to the highly-anticipated halving event in April that will lower the supply of fresh tokens.
In a note to investors, the strategists led by Nikolaos Panigirtzoglou wrote that the sustained open interest in CME Bitcoin futures and the declining ETF inflows are significant bearish signals for the price of BTC.
They highlighted that as the block reward halving event edges closer, investors are more likely to continue taking profits from their Bitcoin investments, particularly against a position that still looks overbought despite last week’s price correction.
In February, analysts at the American megabank predicted that Bitcoin’s price would fall to the $42,000 range post-April as the “halving-induced euphoria subsides”.
Naeem Aslam, chief investment officer at Zaye Capital Markets, predicts that the price of Bitcoin could fall below $50,000 as investor interest in the crypto asset wanes. He argued that investors are questioning the strength of the current rally as it did not take off from the previous all-time high as expected.
Bitcoin hit a new all-time high of $73,398 on March 14th, surpassing its previous ATH of $69,000 that was set in November 2021.
Aslam warned that Bitcoin could face “serious retracement” if the halving does not keep the price momentum going, in which case its price could drop below the $50,000 marker.
Bitcoin has Completed its Price Pullback, Altcoins and Miners are set to Perform Well in the Next Rally
Meanwhile, market analytics firm Swissblock said that Bitcoin had completed its pullback before Wednesday’s bounce, almost touching the target price of between $58,000 and $59,000 set by the agency last week when they called for an imminent cool-off phase.
Henrik Zeberg, an analyst at Swissblock, said in a market update that he does not expect Bitcoin to go any higher and that altcoins and Bitcoin miners will perform “tremendously well” in the next phase of the price uptrend.
Crypto trader Jelle noted that Bitcoin’s bottom for correction is in until it holds the $65,000 level. He added that it could consolidate for a while in the current price range and would have to break above the $69,000 mark to trigger a fresh rally to the upside.
At the time of writing, Bitcoin (BTC) is trading at $66,314 – down 1% in the last 24 hours.
