The cryptocurrency market is experiencing volatility as Bitcoin (BTC) and other leading crypto assets face significant price declines. This pullback comes amid a shift in investor sentiment, with Bitcoin ETFs posting outflows for consecutive days.
Blow to Bitcoin ETFs
Data from Farside paints a worrying picture for Bitcoin enthusiasts. On Tuesday, March 19, all nine Bitcoin ETFs witnessed a staggering total outflow of $326 million. This figure is more than double the outflows recorded the previous day. Even the highly anticipated BlackRock Bitcoin ETF (IBIT) in particular failed to impress, recording only $75 million in net inflows.
Moreover, Grayscale’s Bitcoin ETF (GBTC) continues to hemorrhage funds, with a net outflow of $444 million on Tuesday. This comes despite assurances from Grayscale CEO Michael Sonneshien that GBTC fees would be reduced. The lack of investor confidence in GBTC is concerning, especially given Grayscale’s dominant position in the Bitcoin ETF space.
FOMC meeting is expected
The upcoming Federal Open Market Committee (FOMC) meeting on Wednesday, March 20 is likely a major factor contributing to investor hesitation. The potential for policy change by the Federal Reserve is causing uncertainty and leading some investors to adopt a wait-and-see approach.
The decline in investor confidence has had a direct impact on the price of Bitcoin. As of Wednesday, March 20, BTC fell below $62,000, marking a 6% decline. Analysts warn that the critical $60,000 psychological support level may be tested in the coming days.
Is the bull market over?
Although the outlook looks bleak, some analysts remain optimistic about Bitcoin’s long-term prospects. CryptoQuant’s latest analysis suggests that the current pullback may not signal the end of the bull market. The role of spot Bitcoin ETFs in maintaining stability at the $60,000 level is seen as critical.
Drawing parallels with historical Bitcoin cycles, analysts underline that previous bull markets did not stop at all-time highs. The continued development of Exchange Traded Funds (ETFs) and the upcoming BTC halving event are cited as potential catalysts for future upside. But the near future looks uncertain, with investor sentiment heavily dependent on the outcome of the FOMC meeting and the broader macroeconomic environment.
Two altcoins rise as Bitcoin falls
The bearish sentiment also affected altcoins. While Ethereum (ETH) fell below $3,200, other leading altcoins such as Solana (SOL), XRP, and Cardano (ADA) witnessed significant price declines. Surprisingly, meme coin Pepe Coin (PEPE) managed to reverse the trend and gained over 7%. Additionally, Celestia (TIA) also experienced a 7 percent increase. Thus, these two cryptocurrencies stood out with their rise while the market was bleeding.
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