Author: Mary Liu, BitpushNews
Federal Reserve Chairman Powell concluded his two-day semi-annual congressional testimony, where he talked about current monetary policy, acknowledging that considerable progress has been made on inflation, while saying that inflation does not need to be below 2% before cutting interest rates, and there is no specific inflation number to determine a rate cut.
Market watchers generally expect at least two rate cuts in 2024, and Powell’s dovish comments reinforced that expectation. Traders now see a 75% chance of a September rate cut, up from 73% yesterday, the CME FedWatch tool showed.
The stock market interpreted the announcement positively, with optimism pushing U.S. stocks to new highs one after another. Both the S&P and Nasdaq indices rose for seven consecutive days and hit all-time highs during intraday trading. As of Wednesday's close, the S&P, Dow Jones and Nasdaq indices all rose sharply, up 1.02%, 1.09% and 1.18% respectively. The S&P closed above 5,600 points for the first time in history.
The crypto market remains in a consolidation phase. BTC rose to a high of $59,500 in early trading on Wednesday, but fell under pressure in the afternoon, falling back below $58,000. At press time, BTC is trading at $57,557, down 0.36% in the 24 hours.
The altcoin market was mixed. Among the top 200 altcoins by market cap, SATS (1000SATS) led the gains, up 21.7%, followed by Siacoin (SIA) with a 17% increase, and Rocket Pool (RPL) with a 13.9% increase. Dog [Runes] (DOG) led the decline, down 5.7%, while Galxe (GAL) and Flare (FLR) both fell 4.7%.
The current overall cryptocurrency market capitalization is $2.12 trillion, with Bitcoin accounting for 53.4%.
German government's coin sale is about to end
On Wednesday, the German government again transferred more than 10,853 bitcoins worth $637.7 million to various CEX and market maker addresses. According to data from the on-chain analysis platform Arkham, the recipients of these transfers included Flow Traders, Coinbase, Kraken, Cumberland DRW and B2C2 Group, and it is speculated that the intention was to sell.
Data shows that as of press time, the German government still holds approximately 15,520 Bitcoins, worth more than $890 million.
Meanwhile, the price of Bitcoin has fallen by about 17% since the German authorities began transferring funds to exchanges on June 18, hitting a low of $53,500 last week. And several analysts believe that if the German government address continues to transfer at the current rate, all of its confiscated Bitcoins may be sold by the end of this week.
ETF inflows remain “healthy”
Inflows into U.S.-listed spot bitcoin exchange-traded funds (ETFs) have increased, with a total of $654.3 million flowing into these products in the three trading days since July 4.
Although ETF inflows have been erratic over the past few months after hitting record highs, overall ETF demand remains healthy.
Nate Geraci, president of the ETF Store, tweeted yesterday: “Today alone, more money has been invested in BlackRock IBIT than in nearly 90% of all 300+ ETFs launched this year combined. Most ETF issuers are fighting for $121M/day inflows, while IBIT has already taken in $18B in 6 months.”
Eric Balchunas, senior ETF analyst at Bloomberg, said: “A ‘pretty good’ day for IBIT (like yesterday’s $121 million) brings in more AUM than most ETFs launched this year will have at year end. About 500 ETFs launched last year, and halfway through 2024, 76% of them still have less than $121 million in assets. It’s difficult for new issuers to attract $100 million in the ETF market. However, since IBIT launched, there have been 60 days with more than $100 million in daily capital!”
Analyst: BTC needs to reclaim at least $60,000 range low as support
Analysts at Secure Digital Markets believe that Bitcoin will face continued short selling after each rebound, and the key level to watch is $60,500. A break above this level would mean Bitcoin returns to bullish territory.
In terms of Bitcoin prices, market analyst Rekt Capital pointed out that although Bitcoin prices briefly broke through $59,000 in early trading on Wednesday, they subsequently fell back below $58,000, indicating that "Bitcoin is not ready to break the downtrend yet" and BTC "needs to reclaim the $60,600 range low as support to return to the re-accumulation range that broke out last week."
Market analyst Moustache holds a bullish view, noting that Bitcoin is about to experience a crossover of its 100-day moving average and 200-day moving average for the first time in its history.
CryptoQuant on-chain data shows that Bitcoin is at a critical stage in this market cycle as several factors suggest that prices will continue to fall, while others indicate that prices are about to bottom.
Among them, the Bitcoin Profit and Loss (P&L) index is hovering near its 365-day moving average, and the previous downward crossover was a precursor to the deep decline that began in May and November 2021, leading to a major market correction. In addition, Tether's market value growth, which is often considered a key driver of the bull market, has now stagnated.
However, data shows that Bitcoin whales are continuing to hoard at the fastest rate in more than a year, with their Bitcoin holdings increasing by 6.3% that month, the highest level since April 2023.
Other positive factors, such as the US SEC's upcoming approval of the Ethereum ETF, suggest that despite signs of weakness in the short term, it will continue to rise in the long run. Bitwise Chief Investment Officer Matt Hougan also said in a report that key positive factors may push Bitcoin to $100,000 by the end of the year.
