The price of Bitcoin (BTC) kept decreasing on April 17, with investors looking forward to the upcoming Bitcoin halving, scheduled for April 20.
According to the data from CryptoMoon Markets Pro and TravingView, Bitcoin’s price started at $63,814 on April 17th. However, it experienced a significant decrease, reaching as low as $59,648, which represents a 7.5% drop from its opening price.
In the Middle East, political tensions are on the rise. At the same time, the price of Bitcoin has been declining more rapidly in recent days for several reasons. One reason is decreased demand for Bitcoin ETFs, which have been relatively stable. Another factor is a stronger U.S. Dollar Index (DXY), making Bitcoin more expensive for buyers using other currencies. Additionally, the technical indicators for Bitcoin are currently weak.
Bitcoin ETFs struggle amid “zero flow” days
On April 17, the red candle indicated a decrease of 3% in the past 24 hours’ value. The deceleration in investments towards Bitcoin spot ETFs contributed to the increased selling force.
On April 16, Farside Investors’ data indicated that US Bitcoin spot ETFs experienced a net withdrawal of approximately $58 million. This trend was fueled by outflows of around $79.4 million from Grayscale Bitcoin Trust (GBTC) and $12.9 million from ARK 21Shares Bitcoin ETF (ARKB). In simpler terms, the Bitcoin ETFs in the US saw a total drain of about $135.3 million on that day, with significant contributions coming from GBTC and ARKB.
The table shows that the majority of ETF issuers experienced no new investments in the past few days, raising queries among market participants.
James Seyfart from Bloomberg’s ETF team shared with his audience on X that approximately 83% of all U.S.-listed ETFs experienced no new investments on April 14.
Seyfartt said,
“On any given day, the vast majority of ETFs will have a flow number of ZERO — this is very normal. There are ~3,500 ETFs in the U.S.. Yesterday 2,903 of them had a flow of exactly zero.”
Seyffart pointed out that ETF shares are manufactured or liquidated only when t Seyffart highlighted that ETF shares are produced or cancelled only when there’s a substantial discrepancy between the demand and supply, and the related cost is less than hedging costs. In Bitcoin ETFs, these creation units comprise 5,000 to 50,000 shares.)
He mentioned that “slight discrepancies will allow market makers to manage share trading as if it were a regular stock.”
According to Seyffart, these flows posed no reason for alarm and were common for many ETFs during the process of recording new investments.
DXY records “best 5-day run since February 2023”
The U.S. Dollar Index (DXY), which measures the value of the US dollar against six major currencies, has climbed a significant 2.56% since hitting a low of 103.52 on April 10. This rise has taken the index to a six-month high of 106.169 reached on April 16, marking its strongest five-day streak in over a year.
According to the Kobeissi Letter, the dollar’s growth in strength could be explained by investors’ belief in continued higher interest rates. The Kobeissi Letter made this statement in a post on X dated April 17th.
“Interest rate cuts have been pushed back to starting in September 2024 with just 2 rate cuts this year.”
Foreign investors are often drawn to higher interest rates in a currency, as they offer better yields on bonds and term deposits. This increased attraction leads to an uptick in demand for that currency, such as the US dollar, from these investors.
Based on a technical analysis, it’s expected that the US Dollar Index will increase by over 0.87% towards its peak in November 2023, which was $106.757.
Bitcoin’s crucial support at $62,000 flipped into resistance
In the short term, traders sought significant levels for Bitcoin’s price movement in the Bitcoins market.
On April 17th earlier this month, an independent trader and X platform user named Ali shared his analysis using Bitcoin’s UTXO realized price distribution (URPD). According to him, the $62,000 mark was a significant support level for Bitcoin.
“$62,000 is a crucial support zone for #Bitcoin. Losing this level could shift the focus to the next significant demand area around $51,500.”
The metric URPD, developed by Glassnode, reflects the speed at which a specific group of Bitcoin transactions-output units (UTXOs) were created on the blockchain.
In simpler terms, Glassnode’s graph shows how much Bitcoin has been recently active at different price levels, which are indicated on the x-axis as the lower bounds for each group.
In simpler terms, the level of support that BTC previously had is now acting as a significant barrier for its buyers to push the price higher.
Based on IntoTheBlock’s IOMAP model, over 1.15 million past buyers hold around 630,110 Bitcoin that they purchased between $62,858 and $64,670.
An IOMAP chart indicated that Bitcoin encountered significant obstacles as it attempted to rebound, while experiencing more support during its decline. This implied that the easiest direction to move in was actually downwards.
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2024-04-17 19:50