Bitcoin (BTC) Nears Range Lows as Market Awaits Ethereum (ETH) ETF Approvals

The cryptocurrency market is currently experiencing a state of uncertainty, with Bitcoin (BTC) nearing higher timeframe range lows on daily, weekly, and monthly charts.

The cryptocurrency market is currently experiencing uncertainty, with Bitcoin (BTC) nearing higher timeframe range lows on daily, weekly, and monthly charts. Additionally, there is a downtrend in lower timeframe charts, ranging from one-minute to 15-minute intervals, according to Bitfinex Alpha.

This uncertainty stems from the substantial supply overhang in the market, highlighted by the recent sale of seized BTC by the German government, adding further pressure. Other significant sources of overhang include Mt. Gox creditors and Bitcoin miners.

Moreover, US spot Bitcoin ETFs have contributed to negative sentiment, with outflows reaching $544.1 million last week alone. However, these outflows were mainly linked to basis/funding arbitrage unwinding rather than genuine sentiment towards BTC. Historically, large sell-offs in ETFs often coincide with local bottoms in Bitcoin prices.

Total cryptocurrency market capitalization has also seen a decline, with Thursdays and Fridays emerging as high-volatility days. Last week, the peak-to-trough decline during these days was approximately five percent, which is substantial for Bitcoin. Historically, such movements often signal at least a local low, presenting potential buying opportunities for traders.

However, the market remains in a wait-and-watch mode. Near-term scenarios could either see continued pressure from BTC overhang sales or a positive shift in sentiment, possibly sparked by Ethereum ETF approvals, which could renew interest in altcoins.

On the macroeconomic front, the US economy is showing signs of cooling, as evident in several key economic indicators. The latest Leading Economic Index report indicated declining consumer optimism due to persistent inflation and high interest rates, predicting a slowdown in the third and fourth quarters of 2024.

Despite this, the job market is showing signs of stability, with initial jobless claims experiencing a modest decline last week.

Significant strain is also evident in the housing market, with housing starts in May plummeting to their lowest level since June 2020. Despite these challenges, retail sales showed modest but positive growth, suggesting resilience among consumers, although the growth is slower than expected.

The industrial sector remains a bright spot, continuing to grow and potentially stabilizing the overall economy. If the trends of cooling economic growth and inflation persist, the Federal Reserve may consider a rate cut in September.

Markets are becoming increasingly optimistic about inflation. The Fed's five-year forward, five-year break-even rate is comfortably at 2.19%, close to the Fed’s two percent target. With jobless claims inching upwards, housing starts slowing, and retail sales growing less quickly, a reduction in interest rates could provide a welcome stimulus for the economy.

In recent crypto news, the German government’s sale of over $195 million worth of Bitcoin contributed to last Friday's decline in BTC. Leading ETF providers, such as BlackRock, VanEck, and Franklin Templeton, are preparing to launch Ethereum ETFs, which could impact market sentiment positively.

News source：https://www.kdj.com/cryptocurrencies-news/articles/bitcoin-btc-nears-range-lows-market-awaits-ethereum-eth-etf-approvals.html

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