Bitcoin market halts rise amid ‘austerity fears’

US Bitcoin spot ETF turns to net outflow in 4 weeks
Growing concerns over interest rate cut delay ahead of FOMC regular meeting
Even the delay in launching the Ethereum spot ETF market was a negative factor.
Bitcoin and major altcoins all fell during intraday on the 11th

As fears loomed inside and outside the asset market that the U.S. base interest rate cut would slow down, the price of Bitcoin (BTC) also turned downward. In addition, the fact that the fund flow of the Bitcoin spot exchange-traded fund (ETF) converted to a net outflow within 4 weeks also affected the Bitcoin price flow.

The U.S. Federal Reserve System's (Fed) Federal Open Market Committee (FOMC) will decide whether to adjust the base interest rate around 3 a.m. on the 13th (Korean time). Looking at the US macroeconomic indicators released until recently, most of them did not meet market expectations. For this reason, concerns are growing both inside and outside the market that the Federal Reserve will slow down the rate of interest rate cuts.

In addition, the selling volume of Bitcoin spot ETFs, led by Grayscale's Bitcoin spot ETF 'GBTC', also overlapped. As a result, the fund flow of the Bitcoin spot ETF, which had been picking up speed again, turned into a net outflow, ultimately becoming a factor in pulling down the Bitcoin price.

Major altcoins also failed to continue their upward trend. This can be interpreted as the fact that trust in the Ethereum (ETH) spot ETF market has been delayed as the market launch has been delayed from day to day.

Last month, the U.S. Securities and Exchange Commission (SEC) only approved '19b-4', the ETF review request, but did not approve 'S-1s', the securities report for official launch. This situation is not progressing significantly. Foreign news outlet The Block reported on the 11th that the SEC has not yet delivered feedback on the S-1 submitted by Ethereum spot ETF issuers, based on testimony from local sources.

◇Bitcoin = As of 5 PM on the 11th, the price of Bitcoin (BTC) is 94.99 million won as of Upbit. Bitcoin market share (dominance) was 55.53%.

Despite the decline of Bitcoin, an analysis was made that there was no short-term plunge in Bitcoin based on on-chain data.

Digital asset expert Van Straten predicted in a report contributed to Crypto Slate, a cryptocurrency media outlet, on the 10th that Bitcoin will not plummet in the short term, citing the increase in the average purchase price of Bitcoin short-term investors as the basis.

Straten attached Glassnode's on-chain data as evidence to support the report's claims. The average price of Bitcoin for short-term investors shown in the data has continued to rise over the past 18 months and exceeded $64,000 last week.

Bitcoin resumed its rise last week due to the heightened popularity of Bitcoin spot exchange-traded funds (ETFs) in the United States, and is currently maintaining the level of about $69,000. Considering that the average price of short-term investors is $64,000, which is about 8% below the current price of Bitcoin, the analysis is that short-term investors will not engage in a 'panic sell' unless there is a sharp drop of less than 8%.

◇ Rising Coin = As of Upbit at 5pm on the 11th, the digital asset that recorded the largest increase compared to the previous trading day was Akash Network (AKT), showing an increase of about 8%.

Akash Network is a blockchain project that trades computing resources. Computing resources such as CPU, GPU, and memory can be traded through the Akash Compute Marketplace, and transaction records are recorded on the Akash blockchain.

◇Fear and Greed Index = The cryptocurrency fear-greed index provided by Alternative has entered the ‘Greed’ stage with 74 points. The greed stage is the stage where price volatility and trading volume increase, and is the stage where prices rise. There is a high possibility of a short-term peak forming, so one must be cautious when selling.

Reporter Seungwon Kwon ksw@