Advertisement
Advertisement
Bitcoin (BTC) News Today: BTC Dips Below $54K; Can ETF Market Save the Day?
By:
Key Points:
- Bitcoin (BTC) declined by 0.62% on Friday, July 5, ending at $56,743.
- Concerns about a BTC supply wave overshadowed US BTC-spot ETF market inflows and rising expectations of a Fed rate cut.
- Sentiment could shift over the weekend, with Fed rate cut bets likely to drive buyer demand for BTC-spot ETFs and BTC.
In this article:
On Friday, July 5, Mt. Gox plans sent bitcoin (BTC) below $54,000 for the first time since February.
Will the Mt. Gox repayment plans trigger a BTC meltdown, or can the US BTC-spot ETF market save the day?
Bitcoin (BTC) Extends Losses Over Mt. Gox Repayment Plans
On Friday, July 5, BTC declined by 0.62%. Following a 5.18% tumble on Thursday, July 4, BTC closed at $56,743. Significantly, BTC extended its losing streak to four sessions.
Investor jitters about the Mt. Gox plans to pay over 141,000 in BTC to creditors continued to impact buyer demand for BTC. If over $8 billion worth of BTC reaches crypto exchanges with the intent to sell, it would dent the positive effects of the US BTC-spot ETF market.
For context, the US BTC-spot ETF market has seen total net inflows of $14.763 billion since the January 11 launch through to July 5.
BTC faced another session of selling pressure, with a dip below $54,000 despite market-friendly US economic data.
US Jobs Report Raises Bets on a September Fed Rate Cut
On Friday, July 5, the crucial US Jobs Report fueled investor bets on a September Fed rate cut.
The US unemployment rate increased from 4.0% in May to 4.1% in June. Economists expected the US unemployment rate to remain unchanged at 4.0%.
Significantly, wage growth slowed, with average hourly earnings increasing 3.9% year-on-year in June after rising 4.1% in May. Softer wage growth could reduce disposable income and curb consumer spending. Downward trends in consumer spending may dampen demand-driven inflation and support a Fed rate cut.
For perspective, average hourly earnings rose at the slowest rate since June 2021 (3.6%). Since the COVID-19 pandemic, wage growth peaked at 5.7% (January 2022). The trend was significant. On Tuesday, July 3, Fed Chair Powell said that wage growth remained elevated, a concern for the Fed.
The closely followed CME FedWatch Tool reflected the market reaction to the Jobs Report. For the September interest rate decision, the chances of the Fed holding interest rates steady fell from 25.7% to 22.1% on Friday.
The change in sentiment was more significant for the week ending July 5, with the probability of the Fed standing pat dropping from 35.9%.
Meanwhile, the US BTC-spot ETF market reacted positively to the US Jobs Report.
US BTC-Spot ETF Market Sees Inflow Boost
On Friday, July 5, the US BTC-spot ETF market was on target for a return to net inflows.
According to Farside Investors:
- Grayscale Bitcoin Trust (GBTC) had net outflows of $28.6 million on Friday, following outflows of $20.5 million on Wednesday, July 3.
- Fidelity Wise Origin Bitcoin Fund (FBTC) saw net inflows of $117.4 million, the highest since June 5.
- Bitwise Bitcoin ETF (BITB) reported net inflows of $30.2 million, while VanEck Bitcoin Trust had net inflows of $12.8 million.
- ARK 21Shares Bitcoin ETF (ARKB) saw net inflows of $11.3 million.
- Excluding flow data for iShares Bitcoin Trust (IBIT), the US BTC-spot ETF market reported total net inflows of $143.1 million on Friday, July 5.
The US BTC-spot ETF market and the Nasdaq Composite Index aligned in their reaction to the US Jobs Report. On Friday, July 5, the Nasdaq gained 0.90% as 10-year US Treasury yields fell by 65 basis points to 4.282%.
Can rising investor bets on a Fed rate cut and US BTC-spot ETF market flow trends rekindle buyer demand for BTC?
In summary, supply-demand concerns pressured BTC and the broader crypto market going into the weekend. However, rising expectations of a less hawkish Fed rate path and a possible upswing in US BTC-spot ETF market inflows could support BTC at the current levels.
Stay informed with our latest updates and insights to navigate the crypto market effectively.
Technical Analysis
Bitcoin Analysis
BTC remained below the 50-day and 200-day EMAs, affirming the bearish price signals.
A BTC move above the 200-day EMA could give the bulls a run at the $60,365 resistance level. A break above the $60,365 resistance level could signal a move toward the 50-day EMA and the $64,000 resistance level. However, selling pressure may increase at the $64,000 resistance level. The 50-day EMA is confluent with the resistance level.
Market sentiment toward the Mt. Gox repayment to creditors will remain a headwind. However, US-BTC-spot ETF inflows and rising bets on a Fed rate cut should cushion the downside.
On the other hand, a break below $55,000 could give the bears a run at the $52,884 support level.
With a 27.23 14-Daily RSI reading, BTC remains in oversold territory. Buying demand may increase at the $55,000 handle.
Ethereum Analysis
ETH sat below the 50-day and 200-day EMAs, confirming the bullish price trends.
A break above the $3,033 resistance level and the 200-day EMA could give the bulls a run at the $3,244 resistance level.
US ETH-spot ETF-related chatter needs consideration.
Conversely, an ETH drop below $2,850 could signal a fall toward the $2,664 support level.
The 14-period Daily RSI reading, 25.68, shows ETH sitting in oversold territory. Buying interest could increase at the Friday low of $2,813.
About the Author
Bob Masonauthor
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.
Latest news and analysis
Advertisement