Despite last week’s outflows from US exchange-traded funds, Bitcoin enthusiasts remain optimistic as the largest cryptocurrency briefly surpasses $70,000 again.
Bitcoin surged by as much as 5.8% to $70,014 on Monday, marking its highest level in over a week.
Other digital assets also saw gains, with Ether up around 5%, while Solana and Dogecoin both rose by over 4%.
Approximately $900 million was withdrawn from these ETFs last week, primarily from the Grayscale Bitcoin Trust, along with reduced subscriptions for offerings from BlackRock Inc. and Fidelity Investment.
Despite ETF inflows slowing down, there’s significant buying interest shown in the market around the $60,000 area, indicating a willingness to buy the dip, according to Nathanael Cohen, co-founder at digital-asset hedge fund INDIGO Fund.
Last week, Grayscale’s Bitcoin Trust (GBTC), known for its notably higher fees compared to its competitors, experienced significant outflows as investors withdrew $1.9 billion from the fund. This led to a net outflow of approximately $900 million across all bitcoin ETFs for the week ending March 22.
Analyst Sam Callahan from Swan Bitcoin attributed bitcoin’s rebound to improving macroeconomic fundamentals, particularly after the Federal Reserve reiterated its intention to implement three quarter-percentage point cuts by the end of the year at its interest rate policy meeting last week. Callahan remarked that such actions would improve liquidity conditions, serving as a positive catalyst for asset prices. Bitcoin, acting as a barometer of liquidity conditions, responded positively to the Fed’s indication that monetary policy would likely ease in the near future.
Additionally, sentiment may have been uplifted by data from crypto derivatives analytics site CoinGlass, which showed that liquidations of bitcoin short positions over the past 24 hours were lower than average. This suggests that investors were not heavily using leverage to speculate on further price declines.
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