FOMC

Bitcoin ETF

The downturn in Bitcoin’s (<a href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow">BTC</a>) price over the last week has led to a “suboptimal” market structure, signaling an overheated market, according to analysts from crypto research firm K33 Research.&nbsp;
In the “Ahead of the Curve” report published on March 19, K33 head of research Anders Helseth and senior analyst Vetle Lunde said Bitcoin’s “slow bleed” and the steadily declining prices across the crypto market accompanied by high funding rates have exposed cryptocurrencies to “ leverage-induced amplified downside volatility.”
The analysts explained that Bitcoin has lost over 13% of its value over the past week after hitting an <a href="https://cointelegraph.com/news/bitcoin-btc-mining-difficulty-reaches-new-historical-high-halving-looms" rel="noopener noreferrer nofollow">all-time high of $73,835 </a>on March 14. Ether (<a href="https://cointelegraph.com/ethereum-price" rel="noopener noreferrer nofollow">ETH</a>) and BNB Chain’s BNB (<a href="https://cointelegraph.com/binance-coin-price-index" rel="noopener noreferrer nofollow">BNB</a>)&nbsp;have also lost 17% and 1% of their value, respectively, per the report.
<blockquote data-ct-non-breakable="true">
 “Bitcoin is currently trading in a 14% drawdown from its all-time high. In all prior bull markets, Bitcoin has seen drawdowns as deep as 30% before recovering.”
</blockquote>
<figure data-ct-non-breakable="true"><img src="https://s3.cointelegraph.com/uploads/2024-03/d0f1be2b-7a05-4859-938e-bbe6539d39e1.png" alt="" title="">
 <figcaption style="text-align: center;">Performance of top three cryptocurrencies by market cap. Source: K33 Research
 </figcaption>
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However, futures open interest is “holding firm while perps maintain significant premiums.”
Helseth and Lunde added that the <a href="https://cointelegraph.com/news/bitcoin-price-drops-9-percent-ath-market-shows-signs-overheated" rel="noopener noreferrer nofollow"></a><a href="https://cointelegraph.com/news/bitcoin-price-drops-9-percent-ath-market-shows-signs-overheated" rel="noopener noreferrer nofollow">overheated conditions were supported</a> by the shallow or negative inflows into Bitcoin investment products last week.
The chart below shows that Bitcoin exchange-traded products (ETPs) have seen declining inflows, with March 18 “seeing a new yearly high daily net outflow of 4,453 BTC.”
<figure data-ct-non-breakable="true"><img src="https://s3.cointelegraph.com/uploads/2024-03/a824d366-649c-4db1-b140-e5b54b1ba47e.png" alt="" title="">
 <figcaption style="text-align: center;">Daily global net BTC ETP flows. Source: K33 Research
 </figcaption>
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The negative flows stem from outflows from Grayscale’s converted Bitcoin Trust exchange-traded fund (ETF), which saw $642 million exit the ETF on March 18, according to data from Farside Investors.
The other nine new ETFs saw shallow inflows, with net outflows resting at $154 million on March 18.
<figure data-ct-non-breakable="true"><img src="https://s3.cointelegraph.com/uploads/2024-03/ab455972-a8d7-4f76-85fd-7677ff8fc1a8.png" alt="" title="">
 <figcaption style="text-align: center;">Bitcoin ETF flow table. Source: Farside Investors
 </figcaption>
</figure>
The K33 research analysts, however, cautioned that it was “too early” to determine whether the spot Bitcoin ETFs have reached a saturation point and whether the recent activity represents a regime change.
<blockquote data-ct-non-breakable="true">
 “While the three-day flow is negative, the weekly net flow to <a href="https://cointelegraph.com/learn/bitcoin-etfs-a-beginners-guide-to-exchange-traded-funds" rel="noopener noreferrer nofollow">Bitcoin ETFs</a> still sits at a solid 27,000 BTC due to back-to-back massive flow days until Wednesday last week.”
</blockquote>
Nonetheless, shallowing ETF flows have been a key contributor to Bitcoin’s “adverse price” action.
Related: <a href="https://cointelegraph.com/news/bitcoin-price-fomc-trader-mid-50k-zone" rel="noopener noreferrer nofollow">Bitcoin price feels FOMC friction as trader eyes trip to mid-$50K zone</a>
<h2 data-ct-non-breakable="true" id="bitcoin-could-find-support-around-the-50-000-support-level">Bitcoin could find support around the $50,000 support level</h2>
Data from <a href="https://subscription.cointelegraph.com/?_gl=1*15uls04*_ga*MTAxMzE3MDgyMS4xNzA2Nzk5MzMw*_ga_53R24TEEB1*MTcxMDg3ODM0NC4xODIuMS4xNzEwODgwMjExLjAuMC4w" rel="noopener noreferrer nofollow">Cointelegraph Markets Pro </a>and <a href="https://www.tradingview.com/symbols/BTCGBP/?exchange=BINANCE" target="_blank" rel="noopener noreferrer nofollow">TradingView</a> showed Bitcoin attempting to recover the $64,000 level after dropping under $62,000 on March 1.
The supply area between $64,500 and $63,500 is a key support that traders and analysts are looking out for, as a breach of this level could result in deeper corrections.
“A normal Bitcoin bullrun pullback is 30%. Back in December, we were already in the longest winning streak in Bitcoin’s history,” founder of Capriole Investments Charles Edwards <a href="https://x.com/caprioleio/status/1770049266532466783?s=20" target="_blank" rel="noopener noreferrer nofollow">said</a> in a post on X.
<blockquote data-ct-non-breakable="true">
 “A 30% pullback would be $51K. These are all levels we should be comfortable expecting as possibilities.”
</blockquote>
Citing a bearish technical setup, analyst Peter Brandt projected BTC’s drop toward $50,000.
“Bitcoin $BTC completes H&amp;S top on Factor Real Range Chart,” Brandt said in a commentary on X accompanying the chart below.
<blockquote data-ct-non-breakable="true">
 “BTW, a correction to mid/upper $50s would retest the upper boundary of the advancing channel from which price thrust from on Feb 26/27.”
</blockquote>
<figure data-ct-non-breakable="true"><img src="https://s3.cointelegraph.com/uploads/2024-03/c1df2aff-09cf-4281-968a-2e0602334f76.png" alt="" title="">
 <figcaption style="text-align: center;">BTC head and shoulders chart pattern. Source: Peter Brandt
 </figcaption>
</figure>
As <a href="https://cointelegraph.com/news/bitcoin-levels-next-btc-price-risks-sub-60k" rel="noopener noreferrer nofollow">reported by Cointelegraph</a>, the meeting of the Federal Open Market Committee in the United States remains this week’s main focus on the macro front, not just for the crypto market but for all risk assets across the board.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin, Ethereum rebound but still show ‘overheated signals’ — K33 Research

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