ETFs
Is Bitcoin’s Fall Over? Experts Recommend Watching These 4 Factors for Clues – DL News
- Bitcoin’s brutal week is over.
- These four factors will indicate how long the recovery will take.
Bitcoin fell as low as $54,300 early Monday, marking a drop of more than 15% since last week.
The crash dragged the entire cryptocurrency market down with it, with the total market valuation dropping by almost 20%. $2.1 trillionaccording to CoinGecko.
“The streets are covered in hemoglobin,” said an analyst at cryptocurrency trading firm Wintermute, capturing the mood among investors.
But how much more will the bloodshed intensify?
Experts point out four factors that influence the price.
Ethereum ETF
Industry experts predict that U.S. regulators will approve Ethereum spot exchange-traded funds. from this week.
The market’s reaction to any positive ETF update will serve as “a barometer of market sentiment as people lick their wounds and start to recover from last week’s move,” said David Zimmerman, an analyst at K33 Research. DL News.
“It would be a great sign” if the launch saw Bitcoin return to levels around $60,000, Zimmerman said.
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Given the close correlation between Bitcoin and Ethereum, a spot Ethereum ETF would also be bullish for Bitcoin.
If Bitcoin’s price rises, Zimmerman said, it would indicate that despite the last bear market, investors still have an appetite for assets like Bitcoin.
Analysts believe that spot Ethereum ETFs will see inflows of $500 million within a week of their launch and $15 billion in net flows in their first 18 months.
Since their launch six months ago, Bitcoin ETFs have seen a record $14 billion in inflows.
Mt. Gox Refunds
The wait for Mt. Gox users to get their money back is over.
Creditors waited a decade to recover up to $9 billion owed in cryptocurrency after the stock market’s catastrophic crash in 2014.
On Friday, the entity in charge of payments began returning $2.6 billion in Bitcoin to creditors.
Many expect creditors to sell their assets as soon as they get their hands on their wallets.
“This will weigh on the market once repatriation picks up in earnest or the market starts paying more attention to it,” Brian Rudick, senior strategist at cryptocurrency trading firm GSR, said recently. DL News.
Others suggest that the damage done by Mt. Gox’s refunds to cryptocurrency prices is already over.
“These distributions are now close to or fully priced in,” the Wintermute analyst said.
Germany
The German government has transferred more than 10,000 Bitcoins, worth nearly $1 billion, to various wallets and exchanges since June 19, according to Arkham Intelligence.
That helped spark last week’s cryptocurrency meltdown, with traders interpreting the government’s move as a sign it planned to sell off swathes of its billions of Bitcoin.
“The German government could slow down now,” Zimmerman said.
Federal Reserve
Traders are also watching for signs that the Federal Reserve is satisfied with its fight against inflation.
A fall in interest rates means investors are more likely to buy riskier assets like cryptocurrencies.
U.S. employment data for May showed a rise in unemployment, reinforcing some experts’ view that job cuts are coming soon.
“September seems like the perfect time for the Fed to begin the rate-cutting cycle,” with the market expecting two cuts in 2024, wrote David Brickell, head of international distribution at FRNT Financial, and former FX trader Chris Mill, in their latest “Join the dots” newscast.
Eric Johansson is the editor-in-chief of DL News. Got a tip? Email us at eric@dlnews.com.