Bitcoin(BTC) Bulls Take a Breather as Key Drivers Lose Momentum

Bitcoin enthusiasts might be feeling a temporary chill after two major factors that fueled the cryptocurrency's recent surge are showing signs of fatigue.

The first is the splashy launch of spot Bitcoin ETFs in the US back in January. These exchange-traded funds, which allow investors to get exposure to Bitcoin without directly owning it, initially sparked a buying frenzy. However, inflows into these ETFs have slowed down considerably in recent weeks.

The second factor is the much-anticipated Bitcoin halving event that took place last week. This event, which cuts the number of new Bitcoins created in half, is often seen as a bullish signal due to limited supply. However, the impact on price this time around seems muted.

These factors, combined with rising tensions in the Middle East and potential delays in US interest rate cuts, have contributed to a growing risk aversion among investors. This is reflected in the negative Bitcoin funding rate, an indicator that traders are less eager to bet on price increases.

There's also a wait-and-see approach emerging. With the excitement surrounding US ETFs fading, all eyes are now on Hong Kong, which is launching its own set of Bitcoin and Ethereum ETFs at the end of April. But whether these new products can replicate the success of their US counterparts remains to be seen.

Overall, while Bitcoin remains above $64,000, there's a temporary cooling down after a period of rapid gains. The market is searching for new catalysts, and Hong Kong's ETF launch is the next event on the horizon.

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