The cryptocurrency market witnessed a turbulent day on Wednesday. Bitcoin (BTC) fell to its lowest level since late February. Additionally, investors withdrew record amounts from U.S.-based spot Bitcoin exchange-traded funds (ETFs). This debut, which totaled a staggering $563 million, was critical. Because it coincided with a brief recovery triggered by dovish comments by FED Chairman Jerome Powell.
There was a mass outflow from Bitcoin ETFs
Data from Farside Investors and CoinGlass revealed net outflows of $563.7 million from 11 US-based Bitcoin ETFs. This marks the largest single-day outflow since the funds began trading in January. It continues an alarming five-day losing streak. Fidelity’s FBTC, in particular, led the outflows with a loss of $191.1 million. This is particularly concerning because FBTC, along with BlackRock’s IBIT, consistently attracted capital in the first quarter. This offset outflows from the more expensive Grayscale Bitcoin Trust (GBTC).
Despite the ETF exit, cryptokoin.com As we reported, Fed Chairman Jerome Powell’s comments at Wednesday’s press conference injected a temporary dose of optimism into the market. Powell emphasized the strength of the US economy. It also quelled fears of renewed interest rate hikes and quantitative tightening (QT), a policy that reduces liquidity in the financial system. This dovish stance, supporting economic growth rather than aggressive liquidity control, was critical. In particular, it briefly pushed Bitcoin from $56,620 to $59,430. The yield on US Treasury bonds also fell along with the dollar index. Because this reflects a more relaxed monetary policy outlook.
However, Bitcoin’s rise was short-lived and fell to approximately $57,300 at the time of writing. This volatility coincides with the lackluster launch of Asia’s first spot Bitcoin and Ethereum ETFs in Hong Kong earlier this week. These launches attracted very low trading volumes, further weakening investor confidence.
Signs of life in altcoins
While Bitcoin and Ethereum (ETH) experienced declines, some altcoins defied the downward trend. Solana (SOL), XRP, and Cardano (ADA) all recorded notable gains. Solana is up 2.75%, XRP is up 1.75% and Cardano is up 0.66%. This selective buying suggests that some investors are sheltering in certain altcoin projects amid broad market uncertainty. The biggest gainers of the day were Axelar (AXL) with 8.11 percent and Polkadot (DOT) with 5.22 percent. EOS and Optimism also increased by around 3 percent.
But despite pockets of strength in the altcoin sector, significant liquidations in the market paint a picture of ongoing investor anxiety, with Bitcoin alone witnessing extended liquidations of $145.55 million in the last 24 hours, according to Coinglass. The coming days will be crucial to determine whether Powell’s dovish stance can provide continued support to the cryptocurrency market or whether the recent outflows from Bitcoin ETFs indicate a deeper shift in investor sentiment.
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