Daily News | Volatility in BTC, Binance's Canadian Exit, and Uncertain Outlook for Crypto ETFs and Financial Markets

Crypto Daily Digest: Bitcoin’s Price Rollercoaster, Binance’s Canadian Exit, And Crypto ETFs’ Mixed Fortunes

Bitcoin (BTC) has seen some price volatility, dropping to $26,928 before attempting a recovery to $27,000. Traders are cautiously optimistic, suggesting the possibility of a temporary bottom and potential new highs in the $36,000 to $42,000 range. However, a weekly close below $27,550 could pose further risks. Concerns have been raised about a potential downtrend in the second quarter, as Bitcoin‘s price struggles to surpass $30,000 and has recently corrected towards $25,000. Indicators such as the U.S. dollar index (DXY), the gold price, the decline in M2 money supply, and the presence of a rising wedge pattern suggest potential risks for Bitcoin‘s price.

In regulatory news, Binance has decided to exit the Canadian market due to new regulations that make it untenable for them. The regulations focus on stablecoins and investor limits, requiring stricter compliance measures and restricting the offering of stablecoins without regulatory consent. Binance’s decision to exit Canada represents a reversal of their earlier commitment to register in the country. Other companies, including Coinbase, Kraken, and Gemini, still plan to pursue registrations.

Despite the strong performance of crypto-linked ETFs in 2023, investors remain hesitant to reenter the market following last year’s losses. The top-performing ETFs have attracted minimal inflows compared to the overall industry, signaling cautiousness among investors, especially retail investors. The collapse of crypto companies and the significant price decline have left many wary of risky assets. While the top ETFs such as Valkyrie Bitcoin Miners ETF and Bitwise Crypto Industry Innovators ETF have performed well, two of them (VanEck Digital Transformation ETF and Global X Blockchain ETF) have experienced outflows, and the inflows for others are much lower than in 2022. It should be noted that the recent gains in crypto ETFs are primarily a recovery from the previous year’s weak performance rather than being driven by strong fundamentals.

Total Crypto Market Cap. $1.087T (-0.37%) - Neutral Outlook

The overall market value of cryptocurrencies has reached a critical point on the daily chart. It appears that the recent decline on Friday might have reached its lowest point and could potentially mark the beginning of a new phase of accumulation on lower timeframes. Despite the quick recovery of the candle’s low from the Creek area (around $1.07 trillion), when we examine lower timeframes, there is a possibility that the market could retest the range between $1.07 trillion and $1.05 trillion, or even drop as low as $1.025 trillion. Such a move could be a strategic maneuver by smart money to induce a final wave of panic selling, allowing them to acquire more assets and establish an easier path for future price increases. Consequently, bulls should exercise patience and closely monitor the ongoing developments on lower timeframes and avoid jumping in too early.

Macro: Debt-Ceiling Progress and Lingering Risks Impact Stocks and Bonds Amid Fed Doubts and Inflation Concerns

On Monday, the financial markets were influenced by progress in debt default negotiations, inflation concerns, geopolitical developments, and the cautious stance of the Federal Reserve, resulting in mixed market performance and increased unease among investors.

US stock futures declined while the dollar remained stable as investors uated progress in debt default negotiations and inflation concerns. Asian stock futures were mixed, with Hong Kong down, Japan up, and Australia’s benchmark slightly lower.

On Wall Street, doubts about the Federal Reserve’s interest rate pause caused stocks and bonds to struggle. Inflation worries persisted, but China’s inflation pressure eased, potentially leading to monetary policy easing. Meanwhile, debt-ceiling talks progressed, but risks of compromise failure remained.

Hawkish comments from Federal Reserve officials added to investor unease. Yields on two-year and 10-year Treasuries rose, and the dollar had its most significant weekly gain since February, seen as a safe haven by investors.

On geopolitical developments, pro-democracy parties’ victory in Thai elections boosted the baht, South Africa’s efforts eased tensions with the US, and the Turkish lira awaited trading amid the presidential race.