Communications

Although the cryptocurrency market experienced a broad sell-off on Monday, August 5th, investors saw this price weakness as a buying opportunity, as evidenced by the influx of $176 million into digital asset investment products last week. Indeed, the week was one of strong rebounds, with the price now flirting again with the $61,000 mark.

Bitcoin recently experienced a sharp 30% drop in one week, reminiscent of the March 2020 crash when markets fell due to the discovery of Covid. After plunging to just over $49,000, Bitcoin’s price has been rebounding. At the time of writing, the price is slightly above $57,000.

It was a remarkable rebound week for Bitcoin, with the price clearly surpassing the important 200-day moving average. Last week, Bitcoin-related exchange-traded funds (ETFs) recorded gains of $1.35 billion, marking the fifth-best week ever for BTC-focused funds.

The massive sale of bitcoins by the German government and fears of sell-offs due to Mt. Gox distributions have continued to weigh on the markets this week, especially in the first half. Germany transferred more than $300 million worth of seized Bitcoin on Tuesday, a day after moving over $900 million in BTC.

Bitcoin investors are hopeful for a promising July as Bitcoin ETFs saw $124 million in inflows. Historically, Bitcoin has a median return of 9.6% in July and tends to rebound strongly. Since April, Bitcoin’s price has fluctuated between $59,000 and $74,000, influenced by seasonal cycles such as profit-taking around tax season in April and May, and increased demand in December.

U.S. spot bitcoin ETFs recorded net inflows of $31 million on Tuesday, after seven consecutive days of net outflows. Since their launch in January, the 11 spot bitcoin ETFs have accumulated a total of $14.42 billion in net inflows.

Bitcoin has fallen below $65,000 yesterday, reaching its lowest level in a month. Continuous BTC sales by miners to finance their operations and disappointed expectations of rate cuts by the U.S. Federal Reserve have contributed to this downward trend. However, a note from Wintermute suggests that this bearish sentiment could be short-lived due to rate cuts initiated by the Bank of Canada and the European Central Bank, indicating possible global monetary easing.

Inflation and interest rates are the talk of the town this week. In this regard, the week was truly divided into two parts. While Bitcoin was still rising when Canada confirmed that the key interest rate dropped below 5%, its price fell to a weekly low before the release of U.S. inflation data and a scheduled Fed meeting on Tuesday. U.S. Bitcoin ETFs recorded their first net outflow in more than 19 trading days.