Bitcoin Price Volatility Amid Market Trends and ETF Inflows

Bitcoin Price Action and Market Trends

Bitcoin (BTC) has been experiencing a volatile yet sideways trading pattern, oscillating between $61,000 and $59,900 in the last 24 hours. This stagnation in price movement can be attributed to a lack of significant catalysts that would typically drive momentum in either direction. A notable spike occurred late Wednesday, following a report indicating that U.S. job growth for the 12-month period ending in March 2024 was revised downwards by 818,000 jobs compared to earlier estimates.

In a separate development, news outlets began circulating reports that Robert Kennedy Jr. might withdraw from the 2024 presidential race by the end of this week, with intentions to endorse Republican frontrunner Donald Trump, who has branded himself as a pro-crypto candidate should he win the election. Polymarket bettors currently assign a staggering 94% probability to this outcome, representing a significant shift in sentiment from earlier in the week.

However, the price surge was short-lived as traders quickly capitalized on the opportunity, leading to a decline in BTC’s value back to lows of $59,900. As trading resumed, BTC managed to recover slightly, climbing back to over $60,800 during the Asian trading hours on Thursday, which contributed to modest gains across the market.

Market Overview and Technical Analysis

According to FxPro’s Alex Kuptsikevich, “The crypto market once again failed to breach the $2.15 trillion market capitalization, sliding 2.3% to settle at $2.1 trillion, nearly returning to the levels observed at the start of the week.” He noted that from a technical analysis standpoint, Bitcoin has retreated after testing its 50-day moving average, continuing its period of consolidation over the past six days.

Kuptsikevich further pointed out that institutional interest appeared to shift towards other assets, particularly gold, which reached record highs on Tuesday amid a weakening U.S. dollar and increased demand from investors seeking safer assets.

ETF Inflows and Altcoin Performance

Inflows into U.S.-listed spot Bitcoin exchange-traded funds (ETFs) remained lackluster, with only $39 million in net flows recorded on Wednesday. Such slow inflows indicate a waning interest from professional investors, thereby exerting bearish pressure on BTC.

Meanwhile, several major altcoins saw gains: Ether (ETH), Solana’s SOL, and BNB Chain’s BNB all increased by approximately 2%. In contrast, Dogecoin (DOGE) and XRP (XRP) remained relatively stable. Notably, Tron’s TRX experienced a decline of 4.5% following a Wednesday rally driven by the launch of a new memecoin generator.

The CoinDesk 20 (CD20) index, which monitors the performance of the largest tokens by market capitalization, rose by 1.54%. Among the standout performers, Polygon’s MATIC surged by 12% ahead of a token migration designed to unify the existing MATIC token into POL, which will be usable across all of Polygon’s blockchains. Additionally, Chainlink’s LINK experienced a 15% increase due to its data feeds being integrated into the lending market Aave’s new release on the zkSync blockchain, indicating a growing demand for the token.

Liquid Staking Derivatives on the Rise

One year ago, HashKey Capital predicted that the total value locked (TVL) in Ether Liquid Staking Derivatives (LSDs) would double from approximately $22 billion in August 2023 to $44 billion by August 2025. As we reach the midpoint of this forecast, it appears that the growth trajectory is on track.

Recent data from DeFiLlama reveals that the TVL of Ether LSDs has reached $36.25 billion, with Lido commanding a dominant market share of 70%. “Despite relatively stagnant ETH prices in recent months, the demand for staking continues to climb, with the validator entry queue hitting an all-time high of around 7,400,” analysts from HashKey Capital noted in a report to CoinDesk. “However, annualized staking yields have stabilized around 3.5% for the past four months, creating a dichotomy where more validators are eager to join, yet rewards remain relatively unchanged.”

Over the past year, analysts have observed substantial growth in ETH staking and LSDs, despite facing challenges concerning incentives and the long-term role of ETH within its broader ecosystem.