Fed Interest Rate Decision, FOMC Projections, and Fed Chair Powell
On Wednesday, the US Federal Reserve left interest rates at 5.50%. Significantly, the Fed eased fears of a less dovish Fed interest rate trajectory. The FOMC projected a 2024 median Fed Funds Rate of 4.60%, unchanged from December. An upward revision to the 2024 growth forecast was also market-friendly.
BTC reacted to the FOMC economic projections and climbed to a Wednesday session high of $68,243 after the FOMC Press Conference. Fed Chair Powell expected to see Fed rate cuts later in the year, aligning with recent testimony on Capitol Hill.
BTC-Spot ETF Market Flow Data Aligns with Fed Policy Outlook
On Wednesday (Mar 20), BTC rallied 9.68%. Reversing an 8.37% tumble from Tuesday, BTC ended the session at $67,996.
BTC-spot ETF market flow data reflected investor angst before the Fed interest rate decision and Fed relief.
On Tuesday (Mar 19), the BTC-spot ETF market saw net outflows of $326.2 million, the highest since launching on Jan 11. Reducing bets on a June Fed rate hike pressured buyer demand for BTC.
Significantly, iShares Bitcoin Trust (IBIT) saw net inflows of $75.2 million, with Fidelity Wise Origin Bitcoin Fund (FBTC) seeing net inflows of $39.6 million. Grayscale Bitcoin Trust (GBTC) continued to record elevated net outflows. On Mar 19, GBTC saw net outflows of $443.5 million, down from $642.5 million on Mar 18. (Source: BitMEX Research).
Bitcoin Price Forecast
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See all Bitcoin forecastsPost-Fed BTC-Spot ETF Market Flow Data for Mar 20 in the Spotlight
Early BTC-spot ETF market flow data for Wednesday (Mar 20) may signal another choppy BTC session.
According to provisional numbers from Farside Investors, FBTC saw net inflows of $12.9 million. GBTC saw net outflows of $386.6 million. Based on available flow data, IBIT must see net inflows above $313.7 million for the BTC-spot ETF market to avoid a third session of net outflows.
ETH Outmuscles BTC Amidst Falling Odds of an ETH-Spot ETF Market
ETH surged 11.36% on Wednesday. Reversing a 10.27% loss from Tuesday, ETH closed the Wednesday session at $3,518.
Despite the Wednesday rebound, sentiment toward the SEC approving one, some, or all of the ETH-spot ETF applications remained weak.
Bloomberg Intelligence Senior ETF Analyst Eric Balchunas shared a timeline comparison of BTC-spot ETF and ETH-spot ETF comments from the SEC, saying,
“James Seyffart has great note out today explaining our 25% odds, i love this timeline comparison chart. Btc spot comments from SEC came 91 days bf final deadline. We curr 65 days away with eth etf deadline. Tick tock..”
Significantly, the SEC has provided no comments, with 51 – 22 days remaining until the May approval window.
Technical Analysis
Bitcoin Analysis
BTC sat well above the 50-day and 200-day EMAs, affirming the bullish price signals.
A BTC break above the $69,000 resistance level would support a move toward the ATH of $73,808. A return to the ATH could give the bulls a run at the $75,000 handle.
On Thursday, BTC-spot ETF flow data for Mar 20 and Mar 21 warrant investor attention.
Conversely, a fall through the $65,000 handle could give the bears a run at the $64,000 support level.
The 14-Daily RSI reading, 56.76, suggests a BTC return to the ATH $73,808 before entering overbought territory.
Ethereum Analysis
ETH remained above the 50-day and 200-day EMAs, sending bullish price signals.
An ETH return to the $3,750 handle would support a move to the $3,835 resistance level. A breakout from the $3,835 resistance level would give the bulls a run at the Mar 11 high of $4,065.
Crypto-spot ETF-related chatter needs consideration.
Conversely, an ETH break below the $3,480 support level could signal a drop to the 50-day EMA and the $3,244 support level. Buying pressure could intensify at the $3,244 support level. The 50-day EMA is confluent with the support level.
The 14-period Daily RSI at 51.00 indicates an ETH return to the $4,000 handle before entering overbought territory.
