Bitcoin under pressure as US growth fears and ETF outflows

Market comment on behalf of Jesse Jarvis  CEO at Kaiko Studios 

Bitcoin under pressure as US growth fears and ETF outflows continue, softer monetary policy to provide support

Bitcoin’s rebound faltered on Tuesday, with the cryptocurrency once again slipping below the USD 115,000 threshold. The decline came as persistent concerns took hold of global markets, as investors weighed signs of weakening U.S. economic momentum and renewed geopolitical tensions. Weaker-than-expected nonfarm payrolls data and downward revisions to previous job figures reinforced concerns about the state of the US economy. However, increasing expectations of a September interest rate cut could provide some support to the market. Markets see a 90% probability of a cut in September, although new data ahead of the next Fed meeting could alter sentiment and expectations. If expectations of a softer monetary policy continue, bitcoin could see a rebound in the run-up to the Fed’s decision.

In the meantime, Bitcoin could remain under pressure if ETFs continue to see strong outflows. BTC ETFs recorded a third session of outflows yesterday, although at a lower pace compared to Friday. Similarly, Ethereum ETFs saw outflows for a second session yesterday, which reached USD 465 million. However, Bitcoin and Ethereum could continue to find support from the large acquisitions from the likes of Strategy. The latter acquired more than USD 2.4 billion in Bitcoin last week and is engaged in an approach that could support the market over the long term.

Zaid Barem / ymm