On Thursday, Bitcoin experienced a slight decline, failing to find significant relief amidst a fragile risk appetite and uncertainty surrounding U.S. interest rates. The world’s largest cryptocurrency decreased by 0.9% over the past 24 hours, reaching $65,525.6 by 01:49 ET (05:49 GMT), and remained well below the record highs reached in March.
Bitcoin continued to trade within a narrow range in recent sessions, as conflicting signals regarding potential U.S. interest rate adjustments left traders cautious about taking significant positions. Additionally, the anticipation of key U.S. nonfarm payrolls data scheduled for later in the week discouraged major trading activity.
Despite the weakness observed in the dollar, which retreated from recent five-month highs, Bitcoin failed to garner significant support. This decline in the dollar followed Federal Reserve Chair Jerome Powell’s remarks, where he provided moderate indications regarding interest rates. While Powell affirmed the Fed’s eventual support for interest rate cuts in 2024, he offered limited guidance on the timing and magnitude of these cuts. Powell also emphasized the Fed’s need for greater confidence in the trajectory of inflation towards its 2% annual target.
Looking ahead, market participants are awaiting further insights from other members of the Fed’s rate-setting committee who are scheduled to speak later in the week. These additional perspectives may provide clarity on the future direction of U.S. monetary policy, influencing Bitcoin’s price trajectory in the coming sessions.
Crypto prices today: XRP, ETH muted as fund flows favor Bitcoin
In the cryptocurrency market, other major digital currencies experienced moderate movements, with a significant portion of capital flows remaining heavily skewed towards Bitcoin. XRP, the world’s third-largest cryptocurrency, fell by 2.4% to reach a one-month low, primarily driven by anticipation surrounding further developments in the ongoing legal case between Ripple and the U.S. Securities and Exchange Commission (SEC).
Meanwhile, Ethereum, the second-largest cryptocurrency by market capitalization, saw a modest increase of 0.3% to reach $3,301.48. The price of Ethereum edged higher ahead of an upcoming decision by the SEC regarding spot exchange-traded funds (ETFs) for the token, scheduled for May.
Recent fund flow data from digital asset manager CoinShares indicated a resumption in capital inflows into digital assets following a record-high outflow. However, the majority of these inflows remained concentrated in Bitcoin. CoinShares analysts highlighted that while capital inflows had increased, ETF activity was slowing down. Daily trading turnover decreased to $5.4 billion in the week leading up to March 30, marking a 36% decline from the peak observed three weeks earlier. This decline suggested that the excitement surrounding the potential approval of Bitcoin ETFs was waning after initially fueling a significant rally over the past two months.
The approval of spot Bitcoin ETFs played a pivotal role in driving the token’s rally in 2024, contributing to its attainment of record highs exceeding $73,000 in March. However, as ETF activity slows down and market dynamics evolve, the cryptocurrency landscape may witness shifts in investor sentiment and trading patterns.