Bitcoin Price Decline Amid Dovish Signals

Bitcoin (BTC) experienced a price decline, currently at $64,763, despite dovish macroeconomic signals from major central banks.

Bank of England Rate Cut

On Thursday, the Bank of England (BoE) cut rates by a quarter point to 5%, marking the first rate decrease in this cycle. This made the BoE the second G7 central bank to lower rates this year, following Canada’s cut in June.

Federal Reserve Indications

After the Federal Reserve maintained steady rates on Wednesday, Chair Jerome Powell suggested that rate reductions could be considered in the upcoming September meeting. This news positively impacted equity markets, with the Nasdaq Composite gaining 2.64% at the day’s end, the S&P 500 increasing by 1.58%, and the Dow Jones Industrial Average rising by 0.24%.

Positive Signals for Cryptocurrency Markets

Jag Kooner, Head of Derivatives at Bitfinex, expressed that these dovish signals could boost investor sentiment in the cryptocurrency sector. A potential rate cut in September could enhance liquidity, making cryptocurrencies like Bitcoin more appealing as investors seek higher returns outside traditional assets. This scenario may lead to an upward pressure on Bitcoin’s price and increased inflows into ETFs.

Bitcoin Facing Overhangs

Despite the positive signals, Bitcoin is still contending with challenges. Recent data indicates that over $2 billion worth of BTC was transferred to a new address by Mt. Gox, contributing to concerns over potential sell-side pressure as creditors receive their recovered funds.

In addition, there has been a noticeable slowdown in U.S. spot Bitcoin ETF inflows, with only $299,000 in net daily inflows recorded. BlackRock IBIT and Grayscale Bitcoin Mini Trust were the only two ETFs to post inflows, while several others saw outflows, including Fidelity’s FBTC and Bitwise’s BITB.

As of publication, Bitcoin trades at about $64,763, reflecting a 3% drop over the last 24 hours.