On Saturday, BTC fell 0.93%, reversing a 0.45% gain from Friday, BTC ended the session at $51,697. Significantly, BTC ended a three-day winning streak.
On Saturday, investors reacted to BTC spot ETF market flow data for February 16. Inflows retreated to the lowest level of the week, which affected buyers’ demand for BTC.
Net inflows decreased from $477 million (Feb. 15) to $331 million (Feb. 16), according to BitMEX Research.
BTC-Spot ETF Market: Net Inflows Affect BTC Price Trends
iShares Bitcoin Trust (IBIT) led the way for the seventh consecutive session. However, IBIT net inflows fell to their lowest level ($191.4 million) since February 7. ARK 21Shares Bitcoin ETF (ARKB) overtook Fidelity Wise Origin Bitcoin Fund (FBTC) into second place, with net inflows of $140 million.
Bitwise Bitcoin ETF (BITB) saw a drop in net inflows after a positive session on Thursday. However, Grayscale Bitcoin Trust (GBTC) saw a modest drop in net outflows. US economic indicators and sentiment towards the Fed’s monetary policy may have impacted flows on Friday.
US Economic Indicators and Fed Rate Cuts in H1 2024
On Friday, US producer price figures for January weighed on market bets on a Fed rate cut in the first half of 2024. Producer prices rose 0.3%, reversing a 0.1% drop since December. Core producer prices rose 0.5% after falling 0.1% in December. Economists expected producer prices and core producer prices to rise 0.1%.
The larger-than-expected increase signaled a rebound in demand that could fuel demand-driven inflation. Upward trends in demand-driven inflation may influence the timeline for a Fed rate cut.
Recent US inflation figures eroded bets on a Fed rate cut in March. According to the CME FedWatch tool, the probability of a Fed rate cut in March fell from 16.0% to 10.0% in the week ending February 16. The chances of a Fed rate cut in May fell from 52.2% to 35.2% over the week.
However, the chances of a 25 basis point rate cut in June rose from 41.9% to 53.7% in the week ending February 16.
Bitcoin Fear and Greed Index Returns to Greed Zone
The influences of the Federal Reserve and the decline in inflows into the BTC spot ETF market affected investor confidence. On Sunday, the Bitcoin Fear & Greed index fell from 76 to 72. Significantly, the index fell from the Extreme Greed zone to the Greed zone.
Despite the return to the greed zone, the Fear & Greed index continues to indicate positive investor sentiment. However, a continued downtrend may reflect a change in sentiment. An index that falls into the Neutral zone could change the narrative.
US economic indicators, FOMC meeting minutes, Fed speakers, and updates related to BTC spot ETFs should be considered next week.
Bitcoin Analysis
BTC settled well above the 50- and 200-day EMAs, sending bullish price signals. A BTC break above Thursday’s high of $52,869 would put the $55,000 level in play. However, a fall below the $51,000 level would give the bears a run towards the $50,500 support level.
The 14-day RSI reading of 77.58 shows BTC in overbought territory. Selling pressure may intensify at the $52,000 level.
Ethereum Analysis
ETH remained well above the 50-day and 200-day EMA, sending bullish price signals. A breakout of ETH from Thursday’s high of $2,867 would support a move towards the $3,000 level. However, a fall of ETH through the $2,750 level would leave the $2,650 support level in sight.
The 14-period daily RSI at 73.99 shows ETH in overbought territory. Selling pressure could intensify at the $2,800 level.
By Audy Castaneda
