11 Apr

Bitcoin (BTC) is poised to build on Wednesday's increase, hovering near $70,800, while ether (ETH) is trading above $3,500, as the market continues to digest higher-than-expected U.S. CPI data and slowing outflows from the Grayscale Bitcoin Trust (GBTC).

"Despite a hawkish CPI report and robust inflation figures, Bitcoin demonstrated resilience, experiencing only a slight retracement to $67,000 following the release of the Fed minutes," noted Semir Gabeljic, director of Capital Formation at Pythagoras Investments, in an email.

Gabeljic added, "However, the 2% decline from Monday's peak of $73,000 indicates that risk assets, including BTC, are factoring in two rate cuts instead of three for the remainder of 2024."

On the decentralized predictions platform Polymarket, bettors seem divided on the number of rate cuts expected by the end of 2024.

Twenty-six percent of bettors are predicting one rate cut, while 28% anticipate two cuts, and 21% have bet on no cuts at all.
In contrast, Jun-Young Heo, a derivative trader at Singapore-based Presto, observed that the market rebounded swiftly following the higher-than-expected CPI announcement, unlike gold or the S&P 500 index.

Heo also noted that the implied volatility of options expiring on April 26th is still trading at a premium, while recent historical volatility is declining.

Furthermore, some market participants are pointing out that bitcoin prices are reacting positively to the slower-than-usual outflows from the Grayscale Bitcoin Trust (GBTC).

On-chain data indicates that the outflow from GBTC stands at $18 million, marking the lowest level since the launch of U.S. bitcoin ETFs.

Jun-Young Heo emphasized the need to observe additional data to determine if GBTC outflows are indeed diminishing to negligible amounts. This is particularly significant given that GBTC carries a higher fee compared to other ETFs.

April 2024, Cryptoniteuae

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