Bitcoin Shows Resilience Compared to Broader Crypto Market Despite Sell-Off: Fineqia

Bitcoin has shown resilience in comparison to the broader digital assets market, maintaining a dominance metric of 55.3%, the highest level since April 2021. In a recent note, Matteo Greco, a research analyst at digital asset investment firm Fineqia International, said that Bitcoin market cap dominance has hit its highest level in three years despite recent sell-offs and market volatility.He also noted that trading volumes have remained robust. BTC Spot ETFs recorded a weekly trading volume of approximately $16.2 billion, with an average daily volume of around $3.2 billion. Since its inception, the cumulative trading volume stands at approximately $212 billion, with an average daily volume of roughly $3.3 billion.

Bitcoin Ends the Week in Red

Ending the week at around $65,650, BTC experienced a 5.3% decline from the previous week’s closing value of around $69,350. The week witnessed notable volatility, particularly during the weekend, following a period of relative stability from Monday to Thursday. On Friday, BTC faced a downturn, dropping to a low of $65,100. The negative trend continued into Saturday, hitting a weekly low of approximately $60,650 before rebounding and concluding the week around $65,650.The weekend’s price drop was attributed to geopolitical tensions in the Middle East. However, market sentiment improved after an announcement of a temporary halt in hostilities among the involved nations. Additionally, the upcoming halving, scheduled for the night between April 19th and 20th, has drawn attention. Previous halving events have historically been followed by 9-12 months of upward trends, but they have also triggered short-term “sell the news” reactions before and after the event.The short-term bearish sentiment is further reflected in the net outflow of $85 million from Bitcoin Spot ETFs during the week. Investors are displaying caution and engaging in profit-taking following the strong uptrend witnessed in Q4 2023 and Q1 2024.

US Inflation Data Surpasses Expectations

On the macroeconomic front, recent US inflation data surpassed expectations, leading to a revision in market participants’ rate cut projections for 2024. Initial expectations included a reduction of at least 75 basis points, equivalent to three 25-basis-point cuts, in interest rates. However, the latest data has shifted projections to anticipate 25/50 basis points cuts during the year, with the first cut expected in Q3 and a potential second cut towards year-end.“The continued presence of inflation levels surpassing central banks’ targets might result in a prolonged period of tighter monetary policy,” Greco wrote. 

“This could further contribute to the short-term challenges faced by risk-on assets, as investors realign their portfolios in response to revised mid-term expectations influenced by the latest financial indicators.”

1/ Impact of Inflation on Crypto (Short Answer):

> Bitcoin’s value proposition strengthens as fiat currencies weaken.

> Stablecoins may lose value in line with fiat currency inflation.

— IshitaPandey.eth (@IshitaaPandey) April 10, 2024

As reported, digital asset investment products witnessed minor outflows amounting to $126 million in the past week.

Bitcoin experienced outflows of $110 million but maintained positive inflows of $555 million month-to-date. 

Short-bitcoin, which had been witnessing outflows for the past three weeks, saw minor inflows of $1.7 million, likely capitalizing on the recent price weakn