Category: NEWS
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Short-Bitcoin funds saw $10M in inflows last week
- CoinShares data shows crypto investment products recorded minor outflows of $2 million.
- But Bitcoin saw a third straight week of outflows totaling $12 million.
- Short-bitcoin funds saw inflows of $10 million amid negative sentiment driven by US economic data.
Digital asset investment products recorded yet another week outflows this past week as macro data continued to weigh on investor sentiment, according to asset manager CoinShares.
While weekly outflows across crypto-related products was a minor $2 million, the broader market sentiment was negative as indicated by the large inflows into short investment products.
Short-Bitcoin inflows hit $10 million
Investment products tied to the world’s largest cryptocurrency Bitcoin recorded a total of $12 million in outflows last week, a third consecutive week of such action. Investors also bet huge on the price of Bitcoin going down that week, with inflows into short bitcoin funds rising to $10 million.
According to CoinShares, the negative sentiment around BTC price last week largely came from the United States.
“Opinions remain polarised though, with the US seeing outflows totalling US$14m, where recent macro data has increased fears amongst investors that the US Federal Reserve (FED) will be more hawkish than expected,” CoinShares head of research James Butterfill wrote.
As we highlighted, the past week was punctuated by the hot economic data (the Producer Consumer Expenditure (CPE) index that suggested inflation was still a key headwind.
Indeed, the market reacted negatively to the macro data, with Bitcoin price dropping to lows of $22,770 on the Bitstamp crypto exchange. However, BTC is back above $23,400.
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Crypto VC exec on bulls’ case
- Chris Burniske says Ethereum could outperform Bitcoin in March due to the Shanghai upgrade.
- Burniske is a partner at crypto-focused VC Placeholder and formerly of ARK Invest (crypto division).
- According to the investor, pullbacks are likely to remain “within current uptrend.”
Chris Burniske, partner at venture capital firm Placeholder and former head of crypto ARK Invest, is bullish on crypto going into March.
The investor believes the recent flip in sentiment has not resulted in deeper rot for major cryptocurrencies, despite the weakness seen across stocks amid investor anxiety over interest rates.
In a tweet posted this weekend, Burniske said the outlook is mostly bullish as recent pullbacks have been largely mild.
“From where I sit, I’m surprised crypto hasn’t pulled back more given weakness in equities and upward repricing in rates — bullish,” he noted.
Ex-ARK Invest head of crypto shares Ethereum and Bitcoin price predictions
Bitcoin and Ethereum have both retreated from year-to-date highs, from above $25k and $1.7k respectively.
As noted above, the leading digital assets by market capitalization have given up the recent gains amid continued jitters over US inflation data. Buy-side volume has also tanked on shifting sentiment around the regulatory environment in the United States returned sell-off pressure across the markets.
But while Bitcoin has retraced to support around $23,000 and Ethereum continues to hover around $1,600, the crypto bull says any further losses in the short term are likely to be “within the current uptrend.”
“To those saying some version of “just wait,” sure we could pull back a bit more, but calls for new lows anytime soon are silly. Pullbacks are consolidation within the current uptrend, imo,” the investor added.
In terms of price prediction for the top two coins, Burniske thinks Ethereum will outperform Bitcoin in March. According to him, ETH is likely to gain fresh momentum from the highly anticipated Shanghai upgrade, which is expected to drive staking flows.
A guess:
-January $BTC beasted, led the rest
-February we mostly consolidated
-March $ETH beasts, leads the rest with Shanghai upgrade driving ETH staking flows— Chris Burniske (@cburniske) February 24, 2023
The outlook is supported by on-chain data, which shows new value sent to the ETH 2.0 deposit contract continues to rise.
Crypto analytics firm Santiment recently shared a chart showing that the number of newly staked coins rose a 5-month high count earlier this week.
📈 #Ethereum $ETH New Value Added to the ETH 2.0 Deposit Contract just reached a 5-month high of $69,991,765.78
Previous 5-month high of $62,631,647.91 was observed on 23 January 2023
View metric:https://t.co/0FBplusJVM pic.twitter.com/eKJuqYojRG
— glassnode alerts (@glassnodealerts) February 25, 2023
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Bitcoin touches $23k support as stocks fall on hot PCE data
- Bitcoin and crypto prices fell as markets reacted to January PCE data.
- The Fed’s favourite inflation measure came in hot, jolting markets lower with S&P 500 declining nearly 1.4% and Dow dropping about 400 points.
- Crypto analyst Rekt Capital says BTC price remains in positive territory as long as bulls hold support above $23k.
Bitcoin price continues to struggle after the rejection from the $25k resistance, but today’s dip comes as the market reacts to hotter-than-expected Personal Consumer Expenditure (PCE) data.
As stocks got whacked on Friday, with the S&P 500 falling nearly 1.5% and the Dow Jones Industrial Average dropping 400 points, BTC price retreated under $24k to hit lows of $23,130 across major exchanges.
Crypto, Wall Street drops on CPE data
The CPE is the Federal Reserve’s most preferred inflation measure and sentiment has shifted on the latest data release as investor jitters fill up again.
The Fed uses the CPE price index to assess how sharply prices have risen within the US economy, and data shows prices spiked 0.6% in January and 5.4% year-over-year. Core CPE also came in hot, at 4.7% against the forecast 4.3% to suggest inflation remains an issue.
“Inflation remains too high. We’re going to have to do more to get back to 2%,” said Cleveland Federal Reserve President Loretta Mester. “I see a little more impetus in the inflation measures than my colleagues. We’re going to have to bring interest rates above 5% and hold there for a time,” she added during an interview with CNBC.
Bitcoin price outlook
The reaction on Wall Street also cascaded into the crypto market, with BTC price declining below a key support line recently highlighted as a “confluent support zone.” The uncertainty around the Fed’s interest rates saw most stocks scorched in early trades, a scenario also replicated in crypto with Ethereum dropping below $1,600.
For Bitcoin’s short-term price outlook, popular crypto trader and analyst Rekt Capital says bulls could remain in control if BTC holds above $23k. However, a bearish outlook would materialize if price breaks lower.
“BTC Weekly retest of the confluent area that is the Lower High and Monthly Range High resistance is now in progress. Price needs to hold here for the retest to be successful. However, Weekly Close below this area would be a bearish sign,” the analyst noted.
A failed #BTC Weekly retest of ~$23400 as support would mean that price remains inside the Monthly Macro Range
Let’s see how the Monthly Closes
1M Close above ~$23400 -> likely range breakout
1M Close below -> $BTC stays in & range & could dip lower in range#Crypto #Bitcoin pic.twitter.com/xTAqH7pVlm
— Rekt Capital (@rektcapital) February 24, 2023
