Bitcoin Rebounds Alongside Wall Street, Trimming Weekly Losses

Following a sluggish start to the day, Bitcoin (BTC) witnessed a notable recovery, turning positive by Wednesday afternoon.

From an early low of $60,900, the cryptocurrency soared to approximately $67,300 by 17:50.

The rise mirrored Wall Street’s uptick, with major stock indices closing higher and setting new records.

This was influenced by the Federal Reserve’s decision and Chairman Jerome Powell’s comments, fueling expectations of interest rate cuts in June.

New York’s stock exchanges saw gains as market sentiment was buoyed by the Federal Reserve’s signaling of potential interest rate reductions in 2024.

This positive outlook also lifted the Brazilian stock market and led to a depreciation of the dollar.

Despite its recovery, Bitcoin remains 8% below its peak of about $73,700 reached last Thursday.

The digital currency had suffered significant losses this week, exacerbated by reduced demand for Bitcoin spot ETFs in the US.

Since January, these funds have attracted roughly $12 billion in net inflows, though momentum has cooled recently.

The Grayscale Bitcoin Trust (GBTC), which transitioned to an ETF, experienced a withdrawal of $444 million on Tuesday, according to investment firm Farside, as reported by The Block.

This followed Monday’s $643 million outflow, the largest since its inception.

Analyst Beto Fernandes from Foxbit highlighted ETF withdrawals as a key factor driving Bitcoin’s price drop.

Despite Grayscale ETF’s ongoing weaknesses, combined with low inflow into these products, resulted in a net negative impact of $154 million.

By 17:50, Bitcoin and other cryptocurrencies saw varying degrees of performance. Some experienced significant gains over the last 24 hours, while others faced declines.

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