Bitcoin (BTC) price slid to the depths of $56,552 on Wednesday as the cryptocurrency market tried to front run the Federal Open Market Committee (FOMC) meeting. The flash crash saw millions in positions get liquidated. Amid an ongoing slow grind up, a BlackRock executive has indicated what could be new tailwinds for the market soon.
Also Read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Altcoins to pump once BTC bottoms out, slow grind up for now
Speaking to a news site, BlackRock head of digital assets Robert Mitchnick said they anticipate a new wave of inflows from “a different type of investor.” This assertion comes after a period of significant lull in terms of capital inflows into the BTC exchange-traded funds (ETFs) market.
❖ BLACKROCK SEES SOVEREIGN WEALTH FUNDS, PENSIONS COMING TO #BITCOIN ETFS
— *Walter Bloomberg (@DeItaone) May 2, 2024
Don't be fooled by the first break in inflows into spot bitcoin exchange-traded funds (ETFs) after 71 straight days. The current lull is likely to be followed by a new wave from a different type of…
Specifically, Mitchnick says the new players could include financial institutions like sovereign wealth funds, pension funds and endowments. If these classes of investors begin to trade spot ETFs, the BlackRock executive said it would signify “a re-initiation of the discussion around Bitcoin.”
Further, Mitchnick revealed that BlackRock, the world’s largest asset management firm, has been talking to different sorts of institutions, including “pensions, endowments, sovereign wealth funds, insurers, other asset managers, and family offices,” among others, about BTC for several years.
Elsewhere, a filling (13F report) from the US Securities & Exchange Commission (SEC) indicates that the second largest European bank (by assets), BNP Paribas, purchased BlackRock BTC ETF shares (IBIT).
The portion of BNP Paribas’ investment into IBIT was very small, 1,030 IBIT shares in Q1 of 2024 at $40.47 a share, for a total of $41,684.10. This is less than the value of a single BTC at current prices. Nevertheless, it is still significant because it points to one of the first confirmed instances where a major financial institution has purchased shares of a spot Bitcoin ETF.
Bitcoin price is trading with a bearish bias, showing lower highs since early April. With the liquidity pool between $60,600 and $59,005 holding as support, BTC could recover. Traders looking to take new long positions for BTC should probably wait for a candlestick close above the $59,200 threshold.
For now, the market is still favoring the bears. First, the Relative Strength Index (RSI) is nose-diving, showing falling momentum, with its lower highs pointing to a growing bearish sentiment.
The DXY Compare indicator also maintains a countercurrent directional bias to Bitcoin price, adding credence to the bearish sentiment.
Increased seller momentum, enough to see BTC record a lower low below the Wednesday bottom of $56,552, could see Bitcoin price drop all the way to the $50,000 range before a possible correction.
BTC/USDT 1-week chart
Conversely, that the RSI continues to hold well above the mean level of 50, and its accompanying Awesome Oscillator (AO) still in positive territory is a good sign. It shows that although the market is on a vertical chop, buyer momentum continues to abound. If the RSI bounces above the mean level and proceed to record two higher highs, it would indicate a shift in sentiment in favor of the bulls.
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.