Matteo Greco, Research Analyst at Fineqia International, writes that bitcoin (BTC) closed the week at approximately USD63,100, marking a 2.8 per cent decrease from the previous week’s closing value of around USD65,000.
Greco writes that, throughout the week, BTC experienced minimal volatility, maintaining a steady and gradual decline, resulting in five out of seven days seeing a decrease in price, culminating in the observed 2.8 per cent decline by the week’s end. This marks the fourth consecutive week of price decline for BTC, following a record-breaking streak of seven consecutive months of growth.
“The recent downtrend can be attributed to increased profit-taking by investors who entered the market during the downturns of 2022 and 2023, as well as ETF investors who witnessed significant price appreciation on their shares after entering the market in the early weeks of 2024.
“Last week saw stagnant demand for BTC ETFs, continuing a short-term trend observed over the past five weeks, with neutral flow in these financial products. ETFs with BTC as the underlying asset experienced approximately USD325 million in outflows during the week, following the USD205 million outflows observed the week prior. This marks the third consecutive week of net outflows for BTC ETFs.
“Trading volume for BTC ETFs also decreased during the week, with cumulative trading volume since inception reaching USD235.7 billion. The total trading volume during the week was USD9.7 billion, with a daily volume of about USD1.9 billion. This reflects a significant decrease in trading activity compared to previous weeks, with an average daily trading volume since inception of about USD3.1 billion.”
Greco says that on the ETF front, the Security and Exchange Commission (SEC) is expected to make a final decision on Ethereum (ETH) Spot ETFs in May. Specifically, the final deadline for the Invesco & Galaxy filing is May 7th, prompting the SEC to respond by that date.
“Market participants anticipate the SEC to withhold approval for these products, despite the approval of BTC ETFs in January. Concerns over the liquidity of ETH’s spot and futures markets, as well as its classification as a security by the SEC in the past, contribute to the scepticism surrounding prompt approval. In the event of rejection, issuers would need to resubmit filings and restart the approval process, potentially leading to approval in Q4 2024 or Q1 2025 in the best case scenario.
“In summary, the current market trends are consistent with historical cycles, as the recent halving event has led to short-term downward price movements, a pattern observed in previous occurrences. Following this, there is typically a nine–12-month period of upward momentum, leading to the peak of the market cycle. If history repeats itself, we may see the current market cycle reaching its peak between Q4 2024 and the first half of 2025.”
