Bitcoin Market Faces Decline Amid ETF Inflows and Fed Rate Cut Speculations

Bitcoin Market Update

Bitcoin (BTC) kicked off the trading week on a down note, experiencing a decline of 3% and trading below the $58,400 mark. This downturn was reflected across the CoinDesk 20, which tracks the performance of the largest digital assets, showing an overall decrease of 5%. Over the weekend, BTC had briefly surpassed $60,000, driven by positive economic data from the U.S. that spurred a late-Friday rally.

In a noteworthy development, Bitcoin exchange-traded funds (ETFs) listed in the U.S. saw substantial net inflows exceeding $263 million, marking the highest level since July 22. Meanwhile, ether ETFs also recorded a modest inflow of $1.5 million, indicating the second consecutive day of positive movement since August 28. However, the optimism quickly faded as crypto markets experienced a slump on Monday, coinciding with the opening of Asian exchanges in anticipation of a pivotal week for traders globally.

Market participants are closely watching the Federal Reserve, which is expected to announce its first interest rate cuts in over four years. According to Polymarket bettors, there is a 51% probability of a 50 basis points cut and a 48% chance of a 25 basis points reduction, leaving only a 2% likelihood that no changes will occur. Historically, a pivot towards lower borrowing costs has fostered a bullish sentiment among traders, as inexpensive access to capital tends to stimulate growth in riskier sectors.

On the altcoin front, Ether (ETH) led the losses among major cryptocurrencies, suffering a significant 5.5% drop over the past 24 hours, marking its steepest one-day decline since early August. Other cryptocurrencies also felt the impact, with Cardano’s ADA and Solana’s SOL falling by 5% and 4%, respectively. In contrast, BNB Chain’s BNB showcased resilience, emerging as the best performer with only a 1.1% loss.

In a rare positive turn, Nervos’ CKB was among the few cryptocurrencies to gain traction, experiencing a remarkable 10.5% surge in the last 24 hours. This uptick can be attributed to ongoing positive sentiment following the token’s listing on Upbit, a Korean exchange known for its strong interest in memecoins. Meanwhile, futures traders who had bet on rising prices faced significant losses, with over $143 million wiped out amid the abrupt market downturn, as reported by CoinGlass.

Additionally, the widely monitored BTC/ETH ratio, which measures the relative performance of the two largest cryptocurrencies, has fallen to its lowest levels in four years. Ethereum, as a protocol, has been facing stiff competition over the past year, particularly from Solana, which has become a popular platform for launching memecoins. Newer chains such as Base and the Telegram-affiliated TON have also begun to capture significant attention, likely impacting demand for ETH.

Meanwhile, Sony’s upcoming Soneium platform is poised to add more competition to the landscape as it develops further. In a recent announcement, Sony and Circle revealed that USDC would be supported on the new chain, although specific details regarding the amount to be issued were conspicuously absent.