The post Expert Analyzes Factors Behind Bitcoin Price Weakness and Predicts Positive Turnaround appeared first on Coinpedia Fintech News
James Butterfill, the Head of Research at CoinShares recently joined analyst Scott Melkar to discuss the state of the cryptocurrency market. Butterfill explained that the accuracy of economic forecasts and how they align with actual data is crucial. Currently, most macroeconomic data is falling short of expectations, indicating that analysts have been overly optimistic. This suggests that the US macroeconomy is not as healthy as believed.
The Federal Reserve (FED) is part of this trend. While the FED is discussing one rate hike this year, the market anticipates two. Butterfill believes the marketâs prediction is more accurate. If the FEDâs Dot Plot shifts over the summer and aligns more closely with market expectations by September, this could significantly support Bitcoin.
Currently, much of Bitcoinâs initial price weakness and recent downturn can be attributed to market disappointment with the FEDâs stance on rate cuts. The FEDâs indication of only one potential rate cut this year has disappointed investors, but Butterfill expects this outlook to change throughout the year, potentially benefiting Bitcoin.
Butterfill explained that on the altcoin side, weâre seeing significant inflows relative to the smaller scale of these assets. For example, Cardano has $52 million in assets under management, but last week it saw an inflow of about $1 million. Relative to its size, this is quite substantial. According to him, this year, there has been notable interest in the altcoin market, with investors diversifying into various cryptocurrencies.
âOn the altcoin side of things, thatâs where weâre seeing measurable inflowsâwell, relative inflowsâbecause obviously, assets under management in these altcoins are a lot smaller. So if you take something like Cardano, for instance, it only has $52 million of assets under management, but last week it saw around a million dollars of inflow. What Iâve seen this year is that people are bottom-fishing in the altcoin market,â he said.