Cryptocurrency

Bitcoin Prices Flatline Under $75,000 Ahead of Potential US Interest Rate Adjustment

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CoinDesk 20 Index: 2,238.35 +1.98%
Bitcoin (BTC): $75,007.25 +0.43%
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Bitcoin traded around $75,000 during the European morning, about 2% lower than the all-time high of nearly $76,500 set on Wednesday. Following Donald Trump’s election victory, attention will turn to the next round of interest-rate cuts by the Fed, with analysts forecasting a 25 basis-point reduction later Thursday.

While lower borrowing costs are generally seen as a bullish signal for risk assets such as crypto, this one might prove to be a non-event. The CME’s FedWatch tool shows traders are assigning a nearly 100% chance of the Fed trimming the benchmark rate to 4.5%-4.7%, so the reduction is already priced in.

BTC’s Rally to an All-Time High on Wednesday

The rally to an all-time high on Wednesday coincided with massive inflows into ETFs, which added a net $621.9 million, snapping a three-day streak of outflows. What was noteworthy was the strong inflows came despite market leader BlackRock’s IBIT seeing net outflows of $69 million.

Trading volume in the ETF was at a record level, according to Bloomberg analyst Eric Balchunas. ‘IBIT just had its biggest volume day ever with $4.1b traded,’ Balchunas wrote. ‘It was also up 10%, its second-best day since launching, some of this will convert into inflows’.

IBIT’s Outflows Were Offset by Over $300 Million of Inflows for Fidelity’s FBTC and Over $100 Million Apiece for ARK 21Shares’ ARKB, Bitwise’s BITB, and Grayscale’s BTC.

Ether is over 7% higher in the last 24 hours, outperforming the broader digital asset market, which has risen by 2.7%, as measured by the CoinDesk 20 Index.

ETH crossed $2,800 for the first time since early August, breaking out of the $2,300-$2,600 range that has persisted even while other coins were rallying. President-elect Trump’s victory may bestirring hopes of a ‘DeFi Renaissance’ and with it a breakout in the price of ether.

‘DeFi Renaissance Thesis is Progressing as Expected With Trump Deregulation and Crypto Friendly Policy and Rule-Making from Republican Admin and Senate’

Arthur Cheong, co-founder at DeFiance Capital, wrote in an X post.

Chart of the Day (Amberdata)

The chart shows short and long-term risk reversals (25rr) measuring the spread between pricing for call and put options.

Risk reversals are positive, signaling a bias for calls or a bullish outlook. Short-duration risk reversals now exhibit a relatively stronger call bias, a sign of bullish euphoria that usually presages price corrections.

Source: Amberdata – Omkar Godbole

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