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The price of Bitcoin (BTC) is unstable on Wednesday
The price of bitcoin (BTC) remained below $66,000 late in the day during U.S. trading hours on Wednesday, after a pair of modest rallies were met by rapid selling action.
At $65,800 as of this writing, Bitcoin has remained stable over the past 24 hours. Dragged by the 10% drop in bitcoin cash (BCH) and litecoin (LTC) the widest CoinDesk 20 Index is 0.7% lower.
Bitcoin managed two rallies around the $66,500 level on Wednesday, one following a weaker-than-expected report on March growth in the US services sector and another after Federal Reserve Chair Jerome Powell said he continues to expect cuts rates this year despite continued perseverance in both inflation and the economy.
The majority of bitcoin’s rally in 2024 occurred roughly from mid-February to mid-March. It was during this period that spot ETFs regularly added 5,000-13,000 bitcoins each day, even with considerable selling by Grayscale’s GBTC. Since then, however, large bitcoin sales have continued at GBTC, while buying in the other ETFs has slowed. On many days, net flows into the spot ETF group as a whole have turned negative.
Furthermore, the price of bitcoin has fallen about 10% from the record high of nearly $73,500 reached on March 12.
Besides spot ETFs, another catalyst hoped for this year was looser monetary policy from the Fed. Economic indicators, however, have destroyed much of this case.
Inflation, which had been steadily declining throughout 2023, actually picked up in the early months of 2024. At 3.2% year-over-year in February, it remains well above the Fed’s 2% target. Additionally, according to government statistics, the economy appears to continue to grow steadily, with the addition of more than 200,000 jobs per month so far this year and the unemployment rate remaining near historic lows.
ADP reported this last Wednesday growth in private wages of 184,000 in March, exceeding February’s 155,000 and expectations for 148,000. The main event on jobs will be the government’s nonfarm payrolls report on Friday morning, with economists expecting 200,000 new hires.
Positive data of late has pushed the 10-year U.S. Treasury yield to a 2024 high of 4.43% and the U.S. dollar to its strongest level since last November, both of which could tend to curb the prices of risky assets, including Bitcoin.