Bitcoin Price Update

Bitcoin’s price was flat on Tuesday as a recent rebound lost momentum while capital inflows persisted. Focus shifted to upcoming cues regarding U.S. interest rates this week.

The world’s leading cryptocurrency had initially risen after the Federal Reserve cut interest rates last week, signaling the start of an easing cycle. Lower rates generally bode well for crypto investments.

However, the momentum waned as markets sought clearer signs on the Fed's future rate cuts. Broader crypto sentiment remained weak due to decreasing retail demand and an uncertain regulatory landscape.

As of 08:30 ET (12:30 GMT), Bitcoin was steady at $63,625.00.

Bitfinex Analysis on Bitcoin's Downtrend

Bitcoin experienced a notable resurgence after dipping below $54,000 earlier this month. Caution persists among analysts from the cryptocurrency exchange, Bitfinex, who argue that a complete bullish reversal is not yet confirmed.

In a note shared with CoinDesk on Tuesday, analysts emphasized the need for Bitcoin to surpass the August high of $65,200 to indicate the end of its prolonged downtrend. This downtrend has been characterized by lower price highs since March.

> “BTC is now within reaching distance of the Aug. 25 top of $65,200. Since the all-time high of $73,666 on March 14th, BTC has failed to exceed a single high before forming a local/new bottom. This is technically classified as a downtrend.”

They concluded that a solid breach above this level would signify the end of the interim downtrend, continuing the broader upward trend from October 2023 when Bitcoin traded below $30,000.

Despite the recent rise in price, a flattening cumulative volume delta since Bitcoin crossed $63,500 indicates a slowdown in spot market buying, suggesting caution as per Bitfinex’s assessment. This cumulative volume delta tracks net buying and selling volumes on centralized crypto exchanges over time.

Crypto Capital Inflows

Data from digital asset manager CoinShares revealed that crypto investment products saw a second consecutive week of capital inflows, driven by optimism surrounding the Fed's rate cut.

Last week's inflows totaled $321 million, a decline from the previous week, with Bitcoin being the main focus despite an increase in short-Bitcoin positioning.

Conversely, Ether had a fifth straight week of outflows, while most other altcoins noted mild inflows. Regardless of the two weeks of inflows, capital inflows and trading volumes remained significantly lower than those earlier this year, reflecting the weak sentiment in the crypto market.

Additionally, the potential tight U.S. presidential race adds uncertainty to the crypto landscape, as only Republican candidate Donald Trump has shown a pro-crypto stance. In contrast, Democratic nominee Kamala Harris is anticipated to uphold the Biden administration's crackdown on cryptocurrencies.

Current Crypto Prices

Broader cryptocurrency prices mirrored Bitcoin's subdued performance. The second-largest cryptocurrency, Ether, dipped 0.2% to $2,642.99.

XRP, SOL, and MATIC remained stable to slightly positive, while ADA saw a 5% increase. Among meme tokens, DOGE rose by 2.6%.

Traders are mostly cautious, awaiting addresses from several Fed officials this week, particularly from Chair Jerome Powell. The PCE price index data, the Fed's preferred inflation gauge, is also set to be released on Friday.

Contributed by Ambar Warrick