Bitcoin (BTC) News Today: ETF Flows and Halving Countdown Drive Investor Sentiment

Cryptocurrency

Summary:

Bitcoin (BTC) gained 2.38% on Sunday, closing the session at $71,383.Supply-demand dynamics provided impressive gains for BTC in Q1 as the Bitcoin halving date approached.

Bitcoin Halving Approaches

On Sunday (March 31), BTC gained 2.38%. Reversing a 0.44% loss from Saturday, BTC ended the week up 6.19% to $71,383. Significantly, BTC rallied 17.40% in March after surging 42.80% in February. Year-to-date, BTC was up an impressive 67%.

Supply and demand remain the price dynamic as the Bitcoin Halving event approaches. According to the Bitcoin Halving Countdown, BTC has 20 days and 20 hours until the heavily anticipated halving event.

ETF Store President Nate Geraci had this to say about the upcoming halving event and the first quarter for the US BTC-spot ETF market,

“There are approx. 1.3million bitcoin left to be mined (ever)… Will take until 2040 for that to happen. Spot bitcoin ETFs have accumulated a net 200k+ bitcoin in less than 3mos. Wild.”

In the run-up to the Bitcoin halving event, the Fed interest rate path and BTC-spot ETFflow data need consideration. The US BTC-spot ETF market was closed on Friday (March 29), forcing investors to wait until April 1 to react to the Personal Income and Outlays Report (Fri) and Fed Chair Powell comments.

If the BTC-spot ETF market sees a slump in net inflows or registers total net outflows for the session, BTC could be more sensitive to US economic indicators this week.

Nonetheless, an extended trend of net inflows across the US BTC-spot ETF market could cushion the depth of a post-halving event correction. However, Grayscale Bitcoin Trust (GBTC) must see net outflows continue to fall to support sentiment toward the BTC-spot ETF market.

Grayscale Bitcoin Trust (GBTC) saw total net outflows of $967.1 million in the week ending March 28, down from $2,001.3 million of net outflows from the previous week.

As the Bitcoin halving clock counts down, market uncertainty lingers about the SEC approving ETH-spot ETF applications.

Outlook for the ETH-spot ETF Market

On Friday, Nate Geraci shared an update from Bitwise and its ETH-spot ETF filing, saying,

“Sad we need an ETF issuer to run correlation analysis showing that govt agency approved futures tightly track price of underlying asset… And a sister govt agency has approved ETFs holding said futures, but won’t approve ETFs holding underlying. Can’t make this up.”

Bitwise had this to say about its correlation analysis,

“The results show a strong correlation between the ETH spot market and CME ETH futures market, at a level substantially similar to the findings of the SEC’s analysis in the spot bitcoin ETF approval order.”

Pressure is mounting on the SEC to approve ETH-spot ETFs as the May approval window approaches. On Friday, Ether developer firm Consensys sent a comment letter to the SEC, requesting the SEC to approve ETH-spot ETF applications. Notably, Consensys has indirect links to former SEC Chair Jay Clayton via Electric Capital, a crypto-centric venture capital company invested in Consensys.

ETH gained 3.94% on Sunday, ending the week up 5.57% to $3,647. ETH trailed BTC in March, rising by 9.13%. Year-to-date, ETH was up 58%.

Technical Analysis

Bitcoin Analysis

Bitcoin (BTC) News Today: ETF Flows and Halving Countdown Drive Investor Sentiment_1

BTC hovered comfortably above the 50-day and 200-day EMAs, sending bullish price signals.

A return to the $72,000 handle could give the bulls a run at the March 14 ATH of $73,808.

On Monday, BTC-spot ETF market flow data and Fed chatter need consideration.

However, a drop below the $69,000 support level could bring the $64,000 support level into play.

With a 14-Daily RSI reading of 58.57, BTC could move to the ATH of $73,808 before entering overbought territory.

Ethereum Analysis

Bitcoin (BTC) News Today: ETF Flows and Halving Countdown Drive Investor Sentiment_2

ETH sat above the 50-day and 200-day EMAs, sending bullish price signals.

A breakout from the $3,650 handle would support a move toward the $3,835 resistance level. An ETH return to the $3,835 resistance level could give the bulls a run at the $4,000 handle.

Investors should monitor ETH-spot ETF-related news.

Conversely, an ETH fall through the $3,480 support level could bring the 50-day EMA into play. A break below the 50-day EMA could give the bears a run at the $3,244 support level.

The 14-period Daily RSI reading of 54.10 suggests an ETH return to the $4,000 level before entering overbought territory.

Source: FX Empire

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Samantha Luan

Economic

Commodity

Bullion jumped to as much as $2,265.73 an ounce on Monday, up 1.6% from Thursday’s close, after setting a series of peaks in recent sessions.

The Fed’s preferred gauge of underlying inflation — the core personal consumption expenditures index — cooled in February, data showed Friday, when many markets were closed. That adds to the case for a reduction in borrowing costs, although the central bank has been striking a cautious tone.

A host of positive drivers have pushed up bullion by around 14% since the middle of February. The prospect of monetary easing by major central banks, and elevated tensions in the Middle East and Ukraine have underpinned the rally. There’s also been strong buying by central banks, particularly in China, while consumers there have been loading up on bullion amid ongoing problems in Asia’s largest economy.

After the inflation figures, Fed Chair Jerome Powell said the prints were “pretty much in line with our expectations,” and there wasn’t any rush to cut rates. Later this week, investors will get a further chance to gauge the outlook for the US economy and central bank policy, with monthly payrolls expected to increase by at least 200,000 for a fourth straight month.

Swaps markets are pricing in a 61% chance of a Fed cut in June, up from 57% on Thursday. Lower rates are typically positive for gold, which doesn’t pay interest.

“Inflation data, and Powell’s comments in particular, have provided a further boost to gold, with the market becoming increasingly convinced that the Fed will start to cut rates in June,” said Warren Patterson, head of commodities strategy at ING Groep NV. However, “it wouldn’t take much of a catalyst to see a pullback in the short term,” and that could be a stronger-than expected US jobs report, he said.

Chinese Demand

Spot gold rose 1.3% to $2,258.57 an ounce as of 12:42 p.m. in Singapore, after climbing 3% last week. Its 14-day relative-strength index was near 79, above the 70 level that indicates to some investors prices may have risen too far and too fast. The Bloomberg Dollar Spot Index dipped 0.1%, while silver, platinum and palladium all traded higher.

Gold demand in China has been pronounced in recent quarters. The nation’s central bank has added substantial volumes of bullion to its reserves, boosting holdings in each of the past 16 months. In addition, gold-buying has been gaining in popularity among younger Chinese.

The metal’s positive prospects have been endorsed by a slew of leading banks. Among them, JPMorgan Chase & Co. said last month that the metal was its No. 1 pick in commodities markets, and the price may reach $2,500 an ounce this year. Goldman Sachs Group Inc. said it sees potential for $2,300, highlighting the benefits from a lower interest-rate environment.

Still, gold’s ascent has yet to strike a chord among investors who favor exposure to the metal through exchange-traded funds. Worldwide holdings in bullion-backed ETFs shrank by more than 100 tons in the first quarter, hitting the lowest level since 2019 in mid-March, before a small uptick, according to a Bloomberg tally.

Source: Bloomberg

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Zi Cheng

Traders' Opinions

Cryptocurrency

SEC vs. Crypto Remain the Focal Point for XRP Investors

There was no SEC vs. Ripple case-related news for investors to consider on Sunday. Nonetheless, recent court filings and rulings in the SEC vs. Ripple and Coinbase cases left XRP trailing the broader market. Contrasting with the XRP losses, the total crypto market cap increased by 6.04% to $2,617 billion in the week ending March 31.

The court ruling on the Coinbase (COIN) Motion to Dismiss (MTD) raised concerns about the SEC successfully appealing against the Programmatic Sales of XRP ruling. On March 27, the courts granted the Coinbase motion to dismiss charges relating to Coinbase Wallet. Nonetheless, Judge Katherine Failla did not grant the MTD for charges relating to breaching the US securities laws.

With the SEC and Coinbase going to trial on the charges relating to operating an unregistered exchange, the direction of the case will impact XRP and the broader market. If the SEC wins the case, investors may consider the SEC having a better chance to overturn the Programmatic Sales ruling.

The Timelines for an SEC Appeal against the Programmatic Sales Ruling

However, the SEC must wait until the end of the remedy-related phase of the SEC vs. Ripple case before filing an appeal. The SEC filed its remedy-related opening brief on March 22 and a redacted version on March 26. Ripple must file a remedy-related opposition brief by April 22 and a redacted version by April 24.

According to the court briefing schedule, the SEC must file its reply brief by May 6. Judge Analisa Torres will decide the penalty for Ripple breaching section 5 of the 1933 US Securities Act. The markets expect the SEC to appeal soon after the court ruling on the Ripple penalty.

XRP Price Action

SEC's Appeal Timeline Looms Over XRP's Price Outlook_1

Daily Chart

XRP hovered above the 50-day and 200-day EMAs, confirming the bullish price trends.

An XRP break above the $0.65 handle could support a move to the $0.6609 resistance level. A breakout from the $0.6609 resistance level would bring the $0.70 handle into play.

Investors must track SEC activity and crypto case-related news

Conversely, a drop below the 50-day EMA could signal a fall to the 200-day EMA and the $0.5740 support level.

The 14-day RSI reading, 51.86, suggests an XRP move to the $0.70 level before entering overbought territory.

SEC's Appeal Timeline Looms Over XRP's Price Outlook_2

4-Hourly Chart

On the 4-hourly, XRP held above the 50-day and 200-day EMAs. The EMAs sent bullish price signals.

A breakout from the $0.64 handle would support a move toward the $0.6609 resistance level.

However, a fall through the 50-day EMA would give the bears a run at the 200-day EMA.

The 4-hourly RSI, with a reading of 54.04, indicates an XRP return to the $0.70 handle before entering overbought territory.

Source: FXEmpire

Risk Warnings and Disclaimers

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Zi Cheng

Traders' Opinions

Economic

UK businesses are moving more traditional head-office jobs outside of London after a surge in the cost of living and housing costs makes it cheaper to employ people elsewhere.

Data on vacancies from the analytics firm Vacancysoft provided to Bloomberg shows London-based postings in executive management, human resources and marketing have dropped to 41% of all open roles. Before the Covid-19 pandemic hit in 2020, London had almost 50% of those jobs.

Advertisements for remote work also doubled over that period, while there were also gains in the North of England and the Midlands. The findings suggest London is struggling to maintain its status as the go-to place to live and work, adding to the challenges Mayor Sadiq Khan faces in his bid for a third term.

“For policy makers looking to stimulate the London economy, these findings should cause concern,” James Chaplin, chief executive officer at Vacancysoft. “The trend to regionalization is undeniable. Occupancy ratios remain below pre-pandemic levels. Meanwhile Manchester increasingly is positioning itself as the capital of the North.”

Source: Vacancysoft

Businesses have been growing at a quicker pace outside of London in recent years after inflation pushed up salaries and remote working trends led to smaller offices. At the same time, London-focused employers in banking, consulting or tech tightened their purses last year after high interest rates and a lackluster economic outlook dampened appetite for their services.

While the Prime Minister Rishi Sunak’s government has sought to “level up” areas outside London, the capital historically has been an engine of UK economic growth. A slowdown anywhere isn’t helpful for the ruling Conservative Party, which is trailing the Labour opposition in polls.

The Vacancysoft data chimes with official figures on the labor market showing a slowdown in the pace of hiring over the past year, after a frenzy following the end of pandemic lockdowns triggered companies to scramble for staff.

Firms posted fewer jobs in the capital than in 2019, while roles in almost all other regions grew by double digits over the period, Vacancysoft estimates. London also saw a 50% annual fall in vacancies in 2023, the largest drop in any region.

The retail and consumer goods industry, the largest employer of head office workers, has been steadily expanding outside of London over the last five years. Banking is another sector that’s shifting growth plans outside the City, as the likes of HSBC Bank Plc or JPMorgan Chase & Co. have been migrating functions and scaling up their regional hubs.

Covid and hybrid working also supported businesses moving people outside of London. Video calls and better technology made it easier to communicate with other offices, while workers have become more reluctant to put up with long commutes. That’s led firms to rethink that roles can be relocated outside the capital.

Source: VacancySoft

Britain’s stagnant economy also part in reducing London’s footprint in the jobs market. The UK slipped into a recession at the end of last year, and the Bank of England pushed up borrowing costs to fight inflation. A slowdown in deal-making and dwindling confidence in the outlook reduced hiring for banks, law firms and professional services in the City of London.

There’s some areas where London is building an edge. The capital has expanded its share of tech vacancies since 2019, reaching almost 62% in 2022 before dipping last year. Chaplin said he expects London tech hiring to bounce back as financing conditions improve.

“The softening in the economy and the recession seems to have affected London more than other places,” said Paul Swinney, director of policy and research at Centre for Cities.

London Is Losing Out on New Job Listings for Head Office Staff_3

Source: VacancySoft

Even as the economy recovers, London’s soaring living cost remains a challenge to attract and retain young professionals. Rents in the capital surged over £2,000 ($2,524) a month, while homes still cost 12 times average annual earnings, recent figures from the Office for National Statistics showed.

“People graduating from Manchester University for example, no longer feel they have to go to London to advance their careers,” Chaplin said. “Manchester has leading institutions across finance, law and technology clustered there.”

Source: Bloomberg

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Alex

Economic

South Korea’s exports continued to grow last month on the back of strong demand for semiconductors and other technology devices, supporting confidence among policymakers that the economy will see a solid first quarter.

Average daily shipments increased 9.9% from a year earlier, according to data released Monday by the trade ministry. Without adjustment for the number of working days, headline exports rose 3.1% while overall imports decreased by 12.3%. The trade surplus came to $4.3 billion. South Korea’s Tech-Led Exports Continue Growth, Boosting Economy_1

South Korea’s Tech-Led Exports Continue Growth, Boosting Economy_1

South Korea is among the world’s largest exporters of goods, making it a bellwether for global commerce. Its dominance in memory chips and smartphones also makes the nation a barometer for tech demand. The latest figures point to continued recovery in global demand especially in the semiconductor sector.

South Korean exports of chips increased 35.7% from a year earlier in March to $11.7 billion, the largest monthly sales total since March 2022, the ministry said. Display exports rose 16.2% and computer sales increased 24.5%, too, underscoring the momentum that stems from technology demand.

“This year’s exports will be driven by technology,” said Lee JaeYoon, a researcher at the Korea Institute for Industrial Economics & Trade. Artificial intelligence and high-performance memory chips are among reasons semiconductor shipments are rising at a fast pace, raising hopes that they may grow enough this year to make up for losses last year, he said.

The growth momentum in exports fueled by the brisk semiconductor sales that has carried into this year is one reason authorities expect the South Korean economy to expand faster in 2024 than last year.

For the first quarter, overall exports amounted to $163.7 billion, an 8.3% rise from a year earlier, generating a trade surplus of $9 billion, according to the trade ministry.

What Bloomberg Economics Says...

“Our forecast is for the economy to expand 0.5% quarter on quarter in 1Q24, building on 0.6% growth in 4Q23. The trade data suggest there’s a chance growth will top our estimate.”

— Hyosung Kwon, economist

Still, the chip recovery will need to be accompanied by a stronger pickup in exports of other products such as automobiles, steel and oil chemicals for authorities to be more certain that the economy will grow more than 2% as they estimate.

The latest report showed shipments of automobiles fell 5% and those of machinery decreased 10% from a year earlier in March, according to the ministry. Oil products rose 3.1%.

Steel exports, which fell 7.8% last month, will likely struggle in particular because of competition from China while demand slackens, Lee at KIET said. South Korea’s Tech-Led Exports Continue Growth, Boosting Economy_2

South Korea’s Tech-Led Exports Continue Growth, Boosting Economy_2

While global trade is gradually recovering, plenty of risks to the outlook remain. The Goods Trade Barometer managed by the World Trade Organization reached 100.6 last month, slightly above the trend baseline, indicating weak upward momentum.

“Merchandise trade should continue to recover gradually in the early months of 2024, but any gains could be easily derailed by regional conflicts and geopolitical tensions,” the global organization said last month.

As a nation that has China as its biggest trading partner and the US as its top security ally, South Korea is among the nations most vulnerable to geopolitical clashes that can weigh on international trade momentum. While US consumer sentiment and spending have remained strong, demand from China has been underwhelming as the world’s second-largest economy struggles to emerge from its property slump.

Exports to the US rose 11.6% from a year earlier in March, to top the value of shipments to China, with automobiles and semiconductors leading the momentum, according to trade ministry data. South Korea’s Tech-Led Exports Continue Growth, Boosting Economy_3

South Korea’s Tech-Led Exports Continue Growth, Boosting Economy_3

South Korea’s total shipments to China edged up 0.4% from a year earlier in March to $10.5 billion, rebounding from a decline. That came as China’s manufacturing activity rebounded last month, ending a five-month decline.

Adding to risks this year is a series of elections scheduled across a wide swathe of the world including the US that could result in protectionist policies that damage trade-reliant economies like South Korea’s.

The country itself will hold parliamentary elections later this month, in a vote that could influence the degree to which it re-calibrates its relationship with China in the long run.

Source：Bloomberg

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Samantha Luan

Economic

Political

Russia's economic resilience in the face of sanctions will be challenged this year, economists say, and they predict that Vladimir Putin could lose the support of the people if the West ramps up sanctions and makes life in the country more difficult.

Russia has so far weathered the impact of Western sanctions, but the nation could see a turning point at the November US presidential election, according to Jeffrey Sonnenfeld and Steven Tian, two Yale researchers who think the West is likely to keep providing support for Ukraine while tightening sanctions on Russia if President Joe Biden gets re-elected.

More economic pressure could make Russians more resistant to Putin's leadership, they said, after a long period of complacency as the president drags the nation into its third year of war.

"People are living regular lives for now, but it's a completely unsustainable strategy, and the fundamental growth drivers underpinning that economy are deteriorating in front of our eyes," Tian told Business Insider. "And if Trump's not elected, then all of that will rise to the surface ... The house of cards [will come] crashing down."

Sergei Guriev, a Russian economist and the incoming Dean of the London Business School, also thinks social unrest could be coming for Moscow. Russia's economy is mirroring its late Soviet Union days, he said, right before intense economic support from the government dropped off and sent some sectors, like manufacturing, spiraling into "deep recession" territory.

Putin's economic fantasy

The tailspin Sonnenfeld, Tian, and Guriev are predicting seems contradictory to what Russia is presenting on the surface. The nation's economy grew 3.6% in 2023, according to data from Russia's federal statistics service. Meanwhile, a record 56% of Russians believe the economy is improving, according to a 2023 poll.

But polls and economics stats coming out of Russia are "beyond misleading," Sonnenfeld argued. Previously, he's made the case that Russia's growth figures are figments of "Putin's imagination," with the Kremlin cherry-picking favorable stats while keeping the more dire data points out of the public eye.

"There's no confidence in the objectivity or the security of Russian polling," he added. "It's fully propaganda."

Putin has claimed that Russia is on its way to becoming the new growth hub of the world. That too, is probably a lie, Guriev suggested.

"Putin doesn't believe that Russia is doing very well. Putin understands the deficiencies of the statistics, but he needs to convince Russians that everything is fine," he added. "This is his job as a dictator, to distribute this."

Other economic indicators show a decidedly bleaker picture of Russia's financial situation. The nation saw the flight of 1 million citizens from the country, 15% of its millionaires, and $19 billion in foreign direct investment in 2022 alone. And while robust military spending has propped up Moscow's economy, that's unlikely to last for much longer, with European researchers predicting a more sluggish growth trajectory for Russia into 2024.

Those stats show that the country's economy is being "cannibalized" by the Ukraine war, Sonnenfeld previously said, no matter how much Putin touts the country's resilience against sanctions.

Biden's reelection and tighter sanctions could be the event that awakens Russian citizens to that reality, Sonnenfeld and Tian said. The West could deliver a potentially crippling blow to Russia's economy if it were to look beyond the oil trade and sanction Russian steel, copper, and other metal commodities, which account for around 20% of the nation's total revenue, they estimated.

Living standards in Russia, meanwhile, are already on the decline. Civilian infrastructure is breaking down, partly because Russia is spending too much on its war. Russian inflation is also high, clocking in at 7.58%, according to data from Russia's economic ministry.

"[There] would be massive unrest when people in Russia realize that Putin's promised path to victory is not going to materialize the way he's promising, when people realize that in terms of Ukraine, there is no pathway to victory."

Guriev doesn't believe Russia's economy will completely unravel, as central bankers will work hard to limit the damage. But inflation and constricted growth will be huge problems for Moscow, resulting in a painful economic restructuring.

"It's unlikely the Russian economy will spiral into a macroeconomic meltdown, and that the Russian political system will," he said. "The necessary condition for the end of this war is of course the change of the political regime and in particular the departure of Mr. Putin."

Other economists have argued that at this point, Russia can neither afford to win nor lose its war, as its economy is too dependent on military spending to be able to stand up on its own.

Source: Business Insider

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Alex

Economic

Central Bank

Japan’s economy is at risk from price pressures from its two largest trading partners, according to the chief of the country’s banking association.

The threat from China is deflation, said Akihiro Fukutome, chairman of Japanese Bankers Association, in an interview. From the US, he sees inflation picking up if Donald Trump returns to office and implements his policies.

Japan is highly dependent on trade and therefore sensitive to economic influence from other countries. Exports of cut-rate steel and chemicals from China can undercut domestic manufacturers, while tax cuts in the US could potentially spur higher prices there.

“The biggest risk is the resurgence of inflation (in the US),” said Fukutome. “A rise in long-term yield is my worst-case scenario, though possibility is still low.”

The Bank of Japan’s recent decision to scrap negative rates and to normalize monetary policy is unlikely to cause major disruptions to the country’s economy and markets, as the move had been well priced in, he said.

Still, with the BOJ tightening and the US Federal Reserve forecast to start cutting rates later this year, he sees potential for market disruptions stemming from the opposite directions.

“I have never seen anything like this before,” said Fukutome. “Depending on the timing (of policy decisions), it could cause volatility in currency, stock and other markets. I think it’s a big risk factor.”

Fukutome is CEO of Sumitomo Mitsui Banking Corp., a core unit of Sumitomo Mitsui Financial Group Inc. He became the chairman of the banking association this month. The position is annually rotated among Japan’s three biggest banks.

Fukutome also said Japanese banks want greater flexibility in providing equity funding to startups.

Traditionally, the country’s banks have been hesitant on lending to startups since they don’t have a track record to establish their creditworthiness. That has shifted and they are expanding finance to these companies in recent years as the government calls on financial institutions to back new ventures.

Bankers Chase Startups in Japan as Funding Dries Up Elsewhere

Current rules allow banks to hold a stake beyond 5% in startups less than 10 years old through investment subsidiaries. Many promising ones, especially those in the field of “deep tech,” are older than that, because their enterprises tend to take more time to become a viable business given a long research-and-development phase, Fukutome said.

“We have been helping startups with debt, but there are very few suppliers of equity finance in Japan,” he said. “We want a little bit more of deregulation here, otherwise we cannot contribute as much as we want.”

In Japan, except for startups and other exceptions, banks are banned from owning a stake bigger than 5% in a company.