SUMMARY
- Bitcoin dropped 3% early in the week, falling below $58,400, driven by expectations of potential Federal Reserve rate cuts.
- S.-listed Bitcoin and Ether ETFs saw inflows of $263 million and $1.5 million, respectively, highlighting ongoing investor interest in crypto assets.
Bitcoin started the week with a sharp 3% decline, dropping below $58,400, as the CoinDesk 20 index, which tracks the biggest digital assets, fell by 5%. This checked a noteworthy move from the weekend, where Bitcoin had risen above $60,000 after favorable U.S. economic data fueled positive thinking. In any case, the markets turned bearish as Asian exchanges opened for trading on Monday, with dealers expecting potential rate cuts by the U.S. Federal Reserve. This would be the first rate cut in over four years. The market assumption is presently driven by the desire for a 51% chance of a 50-basis point cut and a 48% chance of a smaller 25-basis point cut. Generally, rate cuts have boosted bullish sentiment as lower borrowing costs empower development in riskier sectors, including cryptocurrency.
U.S.-listed Bitcoin exchange-traded funds (ETFs) saw over $263 million in inflows, the biggest since July, signaling continued intrigue in the digital resource despite the market’s pullback. Ether ETFs also saw inflows of $1.5 million, marking their second consecutive day of positive streams since late August. Be that as it may, the inflows weren’t sufficient to prevent Ether from driving the market’s losses, with a 5.5% drop over the past 24 hours. This marked its worst one-day decrease since early August.
Other major cryptocurrencies too confronted noteworthy losses. Cardano’s ADA dropped 5%, whereas Solana’s SOL fell 4%. BNB Chain’s BNB fared somewhat superior, emerging as one of the least affected with a modest 1.1% loss. In contrast, Nervos’ CKB token saw a 10.5% gain in the last 24 hours, driven by solid demands after listing on the South Korean exchange Upbit. Upbit is known for its dynamic trading of meme-coins, which likely fueled the token’s rise.
Meanwhile, the widely-watched BTC/ETH ratio, which measures the relative development between Bitcoin and Ether, fell to a four-year low. Ethereum’s market dominance has been challenged by rising competitors such as Solana, which has become a favored stage for launching meme-coins. Also, new blockchains like Base and Telegram’s TON are capturing attention, likely dampening demand for Ethereum.
Futures traders wagering on higher prices suffered losses of over $143 million due to the sudden market downturn, reflecting developing uncertainty as the Federal Reserve’s potential rate cuts linger.