Bitcoin has
shown resilience in comparison to the broader digital assets market,
maintaining a dominance metric of 55.3%, the highest level since April
2021.
In a recent note,
Matteo Greco, a research analyst at digital asset investment firm
Fineqia International, said that Bitcoin market cap dominance has hit
its highest level in three years despite recent sell-offs and market
volatility.
He also noted that trading volumes have remained robust.
BTC
Spot ETFs recorded a weekly trading volume of approximately $16.2
billion, with an average daily volume of around $3.2 billion.
Since
its inception, the cumulative trading volume stands at approximately
$212 billion, with an average daily volume of roughly $3.3 billion.
Bitcoin Ends the Week in Red
Ending the week at around $65,650, BTC experienced a 5.3% decline from the previous week’s closing value of around $69,350.
The week witnessed notable
volatility, particularly during the weekend, following a period of
relative stability from Monday to Thursday.
On Friday, BTC faced a downturn, dropping to a low of $65,100.
The
negative trend continued into Saturday, hitting a weekly low of
approximately $60,650 before rebounding and concluding the week around
$65,650.
The weekend’s price drop was attributed to geopolitical tensions in the Middle East.
However, market sentiment improved after an announcement of a temporary halt in hostilities among the involved nations.
Additionally, the upcoming halving, scheduled for the night between April 19th and 20th, has drawn attention.
Previous
halving events have historically been followed by 9-12 months of upward
trends, but they have also triggered short-term “sell the news”
reactions before and after the event.
The short-term bearish sentiment is further reflected in the net outflow of $85 million from Bitcoin Spot ETFs during the week.
Investors are displaying caution and engaging in profit-taking following the strong uptrend witnessed in Q4 2023 and Q1 2024.
US Inflation Data Surpasses Expectations
On the macroeconomic front, recent US inflation data surpassed expectations, leading to a revision in market participants’ rate cut projections for 2024.
Initial
expectations included a reduction of at least 75 basis points,
equivalent to three 25-basis-point cuts, in interest rates.
However,
the latest data has shifted projections to anticipate 25/50 basis
points cuts during the year, with the first cut expected in Q3 and a
potential second cut towards year-end.
“The
continued presence of inflation levels surpassing central banks’
targets might result in a prolonged period of tighter monetary policy,”
Greco wrote.
“This
could further contribute to the short-term challenges faced by risk-on
assets, as investors realign their portfolios in response to revised
mid-term expectations influenced by the latest financial indicators.”
As reported, digital asset investment products witnessed minor outflows amounting to $126 million in the past week.
Bitcoin experienced outflows of $110 million but maintained positive inflows of $555 million month-to-date.
Short-bitcoin,
which had been witnessing outflows for the past three weeks, saw minor
inflows of $1.7 million, likely capitalizing on the recent price weakn.