Bitcoin and Ethereum show resilience amidst economic indicators and Federal Reserve sentiments. Stay updated on crypto news.
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Bitcoin displayed a stable performance in the early hours of Thursday, anticipating fresh U.S. data concerning two crucial economic metrics—initial jobless claims and housing sales.
As of the current moment, Bitcoin is valued at $51,823.78, showing a modest 0.3% increase since the same time yesterday and virtually unchanged compared to the previous week, as per CoinGecko data.
Both Bitcoin and Ethereum are witnessing indications of traders securing profits and adopting a wait-and-see approach following the U.S. reports on initial jobless claims and existing home sales.
Investors are closely monitoring economic indicators to gauge when the Federal Reserve might consider lowering interest rates in 2024. The hints dropped by FOMC members so far have not been overly optimistic.
"We have ample time, I believe, to gain more confidence in the direction of the economy," stated Federal Reserve Gov. Michelle Bowman during a recent D.C. banking event. "While there might come a time to initiate the rate-lowering process, given the data uncertainties, it's certainly not imminent."
Investors have taken note of her cautious stance.
With 27 days remaining until the next Federal Open Market Committee meeting, only approximately 5% of investors anticipate a rate cut in March, according to the CME FedWatch tool. Current data suggests that 54% of traders foresee a rate reduction in June.
Typically, digital assets and stocks are deemed 'risk-on' assets. Investors often allocate a larger share of their portfolios to risky assets when federal interest rates are low. However, U.S. federal interest rates have experienced a significant rise, moving from 0.25% - 0.50% in March 2022 to 5.25% - 5.50% in July 2023, and have yet to be adjusted downward.
Meanwhile, Yuya Hasegawa, a crypto analyst at Bitbank in Japan, closely monitors the daily flows in and out of U.S. Bitcoin ETFs to gauge trader sentiment. He observed a sharp decline in flows from last week, dropping from approximately $300 million per day to $135 million.
"Nevertheless, it still represents roughly three times the daily supply from the Bitcoin network, indicating that the selling pressure from ETFs is not surpassing demand," he commented. "While a U.S. equity market recovery could boost Bitcoin's price within the current range, surpassing $53k might prove to be a formidable resistance."
On a positive note, Nvidia's robust Q4 earnings report, released yesterday, appears to have uplifted equities. Most major U.S. stock indices concluded the day with positive gains.