Investing.com stock recovered somewhat on Thursday but hovered below key support levels as fears of high US interest rates continued to play out following a Federal Reserve meeting, with the token now entering a bear market from its record high in March.
Bitcoin rose 1.4% over the past 24 hours to $58,679.4 at 2:09 PM ET (12:09 GMT). The token fell below the coveted $60,000 support this week and is now down around 22% from the all-time high of $73,740 it reached in early March.
Bitcoin Price in Bear Market Amid Few Positive Catalysts
A 20% price drop from a recent peak indicates that an asset is in bear market territory, which was now the case for Bitcoin.
The world’s largest cryptocurrency had struggled to post gains after hitting a record high in March, having remained largely within a trading range of $60,000 to $70,000 for more than a month.
But Bitcoin broke below the trading range this week amid a flurry of negative factors, with the biggest weight being the growing belief that US interest rates will remain high for longer. This idea saw the token gain little from an overnight drop in the , as the Federal Reserve said it had no plans to raise rates further.
But the central bank also showed little intention to cut interest rates, especially in light of persistent inflation.
Higher interest rates do not bode well for assets like Bitcoin, which typically thrive in an environment of low interest rates and high liquidity that favors speculative trading.
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Fears of high interest rates also undermined enthusiasm about spot exchange-traded funds (ETFS), which were launched on US markets earlier this week. Bitcoin investment products were hit by a series of large outflows for three consecutive weeks.
The launch of spot-traded ETFs in Hong Kong also brought little cheer to the crypto markets, as the products saw limited inflows during their debut sessions.
Crypto Price Today: ETH Tracks BTC Losses, Altcoins Positive
Broader crypto prices showed more positive trends, with some altcoins even posting double-digit gains.
The world’s No. 2 token rose 3% and climbed 4.9%. meanwhile rose by more than 12%.
Bitcoin ETFs are seeing record outflows daily, despite the Fed’s dovish policy
In line with current bearish sentiment, US-based spot bitcoin ETFs experienced their fastest outflows yet on Wednesday, despite Fed Chairman Jerome Powell downplaying the likelihood of a rate hike.
The eleven ETFs recorded a combined net outflow of $563.7 million, the highest since trading on January 11. This marks a continuation of a five-day downtrend.
This data, from Farside Investors and CoinGlass, shows that nearly $1.2 billion has been withdrawn from these ETFs since April 24.
Notably, BlackRock’s (NYSE:) iShares Bitcoin Trust (IBIT) recorded its first-ever outflow, with $36.9 million leaving the fund. Fidelity’s FBTC saw the largest drawdown in a single day, losing $191.1 million.
This trend marks a sharp reversal, as FBTC and BlackRock’s IBIT previously attracted net funds in the first quarter, offsetting frequent large outflows from the pricier Grayscale ETF (GBTC).
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Grayscale ETF witnessed the second highest outflows of $167.4 million on Wednesday, followed by ARKB at $98.1 million and IBIT’s $36.9 million.
Other funds also suffered significant pullbacks, despite Powell’s overall dovish stance in support of risky assets like bitcoin.
