Cryptocurrencies start the week with good signs. Bitcoin (BTC) rises to US$63,000 after having lost US$60,000 per first time since last February. For its part, ethereum (ETH) is above $3,000.
Altcoins are trading unevenly, with notable increases in the last 24 hours by Solana (SOL). This cryptocurrency already leads the gains of the top 20 with a rise of more than 15%. Meanwhile, Chainlink and Ripple also advance more than 2%.
After a week of much suffering, it seems that optimism is slowly returning to the sphere of digital assets. Macroeconomic data is what is mostly dictating the movements of cryptoassets, diluting the expected positive effect that the fourth halving of the Bitcoin network. And the expectations of interest rate cuts from the Fed have been the great drag and also the great driver of the market in recent days.
The Fed gives investors a break
In this sense, the April employment report from the United States gave a respite to investors, by providing a weaker reading than expected and thus give some room to a Federal Reserve (Fed) which had been showing more reluctance to lower rates than the market expected. In fact, this change in market expectations was the main reason why cryptocurrencies turned downward after the ‘halving’, since the consensus and the Fed itself expected several cuts during 2024, so crypto assets turned downward the moment that narrative was seriously questioned.
However, the most positive data and the statements of the president of the Fed, Jerome Powell which ruled out an increase in interest rates in the near future, improved investors’ risk appetite. In fact, after the US employment data and Powell’s words, the CME FedWatch tool gives a 70% probability that the US central bank will execute the first rate cut in September.
This Improved sentiment is also palpable in the capital flows of exchange-traded funds (ETF) of BTC spot. After BlackRock’s iShares Bitcoin Trust (IBIT) closed a day with negative flows for the first time last week, Friday was the first day that the Grayscale Bitcoin Trust (GBTC) managed to register positive flows since its conversion to a spot ETF. According to calculations by Farside Investors, Grayscale’s listed product added a net $63 million in that session.
For Coinbase experts, it is undeniable that there is a slowdown in capital inflows through ETFs, but they downplay this data and believe that it will gradually recover as macroeconomic conditions improve, since The latest falls have little or nothing to do with specific circumstances of the sector.
Recovery in cryptocurrencies: what value to watch closely for Bitcoin
Javier Molina, senior analyst at eToro, points out that the 15% drops in April, although they correspond “with the historical volatility of the asset”, which has fallen sharply in years of recovery, should not worry investors too much. “This phenomenon is not exclusive to bitcoin as other important assets such as technology indices or prominent companies such as Microsoft and Nvidia also experienced declines, reflecting a broader trend in financial markets affected by inflation and global economic uncertainty. However, The weekly close once again generates positive flows in risk assets and BTC has recovered key levels lost,” he noted.
“Despite the temporary break of $60,000, its recovery places us back in the great range of 60,000-72,000. Until prices exceed that level, we continue in the correction process that has been developing since March. Right now, initial support is at 62,000. Only if the 59,000 are lost will we think about a major correction. Above, resistance at $68,500. If it jumps them, it will try to attack 72,000 and, if successful, will signal new bullish momentum,” he concluded.
