Bitcoin price slightly recovered on Thursday, but remained pinned below key support levels as fears of high U.S. interest rates remained in play after a Federal Reserve meeting, with the token now entering a bear market from its March record highs.
Bitcoin climbed 1.4% in the past 24 hours to $58,679.4 by 14:09 ET (12:09 GMT). The token slipped below the coveted $60,000 support this week, and was now down about 22% from its record high of $73,740, which it hit in early March.
Bitcoin price in bear market amid few positive catalysts
A price drop of 20% from a recent peak signals that an asset is in bear market territory, which was now the case for Bitcoin.
The world’s largest cryptocurrency struggled to make any price headway after hitting a record high in March, and had largely moved within a $60k to $70k trading range for over a month.
But Bitcoin broke below the trading range this week amid a storm of negative factors, with the biggest weight being growing conviction that U.S. interest rates will remain high for longer. This notion saw the token take little advantage of an overnight drop in the dollar, as the Federal Reserve said it had no plans to hike interest rates further.
But the central bank also flagged little intent to begin cutting rates, especially in the face of sticky inflation.
Higher-for-longer rates bode poorly for assets such as Bitcoin, which usually thrive in a low-rate, high-liquidity environment that favors speculative trading.
Fears of high rates also sapped enthusiasm over spot exchange-traded funds (ETFS), which were launched in U.S. markets earlier this week. Bitcoin investment products were slapped with a string of major outflows for three straight weeks.
The launch of spot-traded ETFs in Hong Kong also provided little cheer to crypto markets, as the products saw limited inflows in their debut sessions.
Crypto price today: ETH tracks BTC losses, altcoins positive Broader crypto prices saw more positive trends, with some altcoins seeing even double-digit gains.
World no.2 token Ethereum rose 3%, and XRP climbed 4.9%. Solana, meanwhile, soared over 12%.
Bitcoin ETFs see record daily outflow despite Fed’s dovish stance In line with the current bearish sentiment, U.S.-based spot bitcoin ETFs experienced their most rapid outflows to date on Wednesday, despite Fed Chairman Jerome Powell downplaying the likelihood of a rate hike.
The 11 ETFs registered a combined net outflow of $563.7 million, the highest since they started trading on January 11, marking a continuation of a five-day downward trend.
This data, sourced from Farside Investors and CoinGlass, shows that nearly $1.2 billion has been withdrawn from these ETFs since April 24.
In particular, BlackRock (NYSE:BLK)'s iShares Bitcoin Trust (IBIT) recorded its first-ever outflows, with $36.9 million leaving the fund. Fidelity’s FBTC saw the largest single-day withdrawal, losing $191.1 million.
This trend marks a sharp reversal, given that FBTC and BlackRock’s IBIT had previously been net attractors of funds in the first quarter, offsetting the frequent large outflows from the more expensive Grayscale ETF (GBTC).
Grayscale ETF witnessed the second-highest outflow on Wednesday at $167.4 million, followed by ARKB with $98.1 million and IBIT's $36.9 million.
Other funds also experienced significant withdrawals, despite Powell's overall dovish stance supporting risk assets like bitcoin.
