Bitcoin ETF inflows rebound as Fed holds interest rate steady

Spot Bitcoin ETFs saw a massive surge in inflows on March 20, jumping over 1,300% in a single day after the U.S. Fed decided to keep interest rates unchanged, a move that helped ease market jitters surrounding inflation and broader economic uncertainty.

BlackRock’s IBIT led the charge with a whopping $172.14 million in net inflows, bouncing back after a day of zero movement. Other players like VanEck’s HODL, Fidelity’s FBTC, and Grayscale’s mini Bitcoin Trust also saw more modest gains of $11.9 million, $9.19 million, and $5.22 million, respectively.

However, not everyone benefited. Funds like Bitwise’s BITB, Grayscale’s ETHE, and Franklin Templeton’s EZBC saw investors pulling out nearly $32.7 million altogether, showing that sentiment still varies across providers.

Bitcoin responded quickly, shooting up 4.5% to $85,786 and even briefly hitting $87,431. Ethereum and Solana joined the rally with 4% and 6% gains, respectively. The total crypto market cap climbed 3% to $2.947 trillion, while futures markets saw $355 million in liquidations, mostly from short positions.

Adding to the bullish sentiment was yesterday’s SEC announcement confirming that mining activities for Proof-of-Work cryptocurrencies like Bitcoin, Litecoin, and Bitcoin Cash won’t fall under current securities laws.

While ETF inflows signal a resurgence of demand for regulated BTC exposure, analysts remain divided on Bitcoin’s short-term trajectory.

Analyst RJT_WAGMI points out that Bitcoin is hanging right at a crucial technical level, testing a descending trendline while butting heads with the 100-day moving average and the Ichimoku Cloud. The analyst noted that a breakout from the zone could trigger a strong rally, but if Bitcoin gets rejected here, it may lead to a downside move.

He believes the bull cycle might technically be over, not in a crash sense, but more that it could take another 6 to 12 months for Bitcoin to punch through its all-time high, thanks to tight liquidity and broader economic conditions.