Bitcoin Drops 2% on Sunday, Trading Volumes Hit $1.13 Billion

Bitcoin (BTC) has experienced a relatively calm weekend, continuing to trade sideways after struggling to gain significant momentum. Despite positive developments from the Securities and Exchange Commission regarding mining and ETF inflows, the flagship cryptocurrency's price performance has remained muted. BTC is marginally down over the past 24 hours, trading around the $84,000 mark, with neither buyers nor sellers having a substantial impact on prices.

Investor sentiment towards Bitcoin ETFs has shifted positively this week, with capital flowing back into the ETFs. Bitcoin ETFs registered inflows totaling around $734 million earlier this week as market sentiment turned positive, driven by the Federal Reserve's announcement of potential rate cuts. However, this positive sentiment has not extended to all crypto ETFs, as Ethereum ETFs continue to see outflows. Spot Bitcoin ETFs closed the week positively, with BlackRock’s IBIT seeing significant inflows while Grayscale’s GBIT experienced outflows. Trading volumes across all ETFs hit $1.13 billion on March 21, indicating a resurgence in investor interest.

Global trade war concerns are expected to keep both crypto and traditional markets under pressure until at least April. Analysts suggest that any resolution to these concerns could bring the next big market catalyst and dictate price action. Bitcoin has dropped nearly 20% since the announcement of import tariffs on goods, and trade war fears continue to pressure the market. The Fed’s interest rate policies are also contributing to the market slump by impacting risk appetite among traders. Markets have priced in an 85% chance that the Federal Reserve will keep interest rates unchanged during the next Federal Open Market Committee (FOMC) meeting, set for May 7. However, the Fed has indicated that inflation and recession concerns are transitionary, which could be interpreted as a positive sign for investors.

Bitcoin (BTC) registered a marginal decline on Saturday as price action remained muted following Wednesday’s rally. The optimism after the FOMC meeting has faded, with traders looking to the capital for the next catalyst to dictate price action. The hope that the government will make a significant BTC purchase has also waned in recent weeks, impacting investor sentiment. The Bitcoin Act, reintroduced by Senator Cynthia Lummis, could revive waning BTC demand. The act proposes the US government purchase 1 million BTC over the next five years, with a mandatory 20-year holding period.

BTC entered the weekend positively, rising almost 4% to move past the 200-day SMA and reach an intraday high of $85,363 before settling at $84,002. Buyers retained control on Saturday as BTC registered a marginal increase and settled at $84,398. Despite the positive sentiment, the price fell back in the red on Sunday, dropping over 2%, slipping below the 200-day SMA and settling at $82,611. BTC started the current week on a bullish note, rising almost 2% and settling at $84,016. However, selling pressure intensified on Tuesday as the price plunged to an intraday low of $81,187. It recovered from this level to settle at $82,775, ultimately registering a drop of 1.54%.

Markets rallied on Wednesday following the FOMC meeting, with BTC surging over 5%, moving past the 20 and 200-day SMAs and settling at $85,875. However, the rally was short-lived as BTC lost momentum on Thursday, dropping over 3%, slipping below the 20 and 200-day SMAs and settling at $84,215. Price action remained muted on Friday as BTC registered a marginal decline and settled at $84,051. Sellers retained control on Saturday as buyers failed to build momentum, resulting in another marginal decline and settling at $83,822. The current session sees BTC marginally up as buyers look to push the price above the moving averages and $85,000. A break above the moving averages could set BTC on a course to cross above $85,000. On the other hand, if sellers retake control, the price could fall to $80,000. The RSI sits under the neutral zone, while the MACD indicates buyers have the upper hand.