The cryptocurrency market experienced a notable surge following the release of the latest US Consumer Price Index (CPI) data, with Bitcoin and Ethereum posting gains of 3.4% and 2.43% over the past 24 hours, respectively. Despite this positive movement, the market remains uncertain, with Bitcoin hovering at around $70,000 and Ethereum struggling to break past $4,000. However, there has been a notable shift in market sentiment, especially among retail traders on Binance.
According to Hyblock’s latest findings, 70.25% of accounts on crypto exchange Binance hold net long positions on Bitcoin, a significant increase from 57% just 24 hours prior. This suggests that retail players are increasingly attempting to “buy the bottom,” showing a strong belief in a potential rebound ahead of the Federal Open Market Committee (FOMC) meeting.
ETF Outflows Demonstrate Investor Caution
The behavior by retail investors comes amidst ETF outflows, which demonstrates investor caution ahead of the Fed decision. Data compiled by Farside revealed that Grayscale’s GBTC experienced the largest net outflows amounting to $121 million. Following closely behind are ARK Invest’s ARKB, which witnessed $65.5 million, and Bitwise’s BITB with $11.7 million in outflows. Next up were Fidelity’s FBTC with $7.4 million and VanEck’s HODL with $3.8 million in outflows. Meanwhile, BlackRock’s IBIT did not record any activity on Tuesday.
The latest wave of outflows ended the 19-day streak of net inflows for the 11 spot Bitcoin ETFs in the US, with outflows totaling almost $65 million the day before. This further highlights the cautious approach of investors in the current market environment.
Price Movement and Retail Long Positions
The price movement and the retail long position could indicate that Bitcoin had already priced in the latest CPI data and the upcoming Fed decision. Bitcoin was described by IREN board member Mike Alfred as a “highly intelligent global macro asset” that potentially anticipates and incorporates major economic factors well in advance of their release. This forward-thinking nature of Bitcoin could explain the current market behavior.
Charlie Bilello, the Chief Market Strategist at Creative Planning, tweeted about the US CPI moving down to 3.27% year-on-year in May from 3.36% in April, with US inflation remaining above 3% for 38 straight months. This data could have implications for the crypto market, as lower inflation figures are expected to boost it after weeks of being range-bound.
The surge in Bitcoin and Ethereum prices, along with the retail investor sentiment and ETF outflows, point towards a market that is cautiously optimistic yet still uncertain. The upcoming FOMC meeting could provide further clarity on the direction of the cryptocurrency market. Investors will be closely watching for any announcements or decisions that could impact the future trajectory of Bitcoin and other cryptocurrencies.