Cryptocurrency prices dipped sharply in the overnight session. Bitcoin, the biggest crypto in the industry crashed below $70,000, after rising to over $72,000 on Tuesday. Other popular coins like Ethereum, Render Token, Arkham, and Dogwifhat also suffered a harsh reversal.
Dogwifhat, Render Token, and Arkham dip
Dogwifhat price crashed by over 14% on Wednesday morning while Render Token fell by 12%. Arkham, Conflux, and Pepe dipped by over 10%.
The main reason why cryptocurrencies dipped sharply is that many spot Bitcoin ETFs have seen more outflows in the past few weeks. Grayscale Bitcoin ETF (GBTC) has led this sell-off as investors moved to other cheaper ETFs.
Data compiled by ETF.com shows that the iShares Bitcoin ETF (IBIT) inflows have slowed down sharply in the past few weeks. It had $597 million inflows last week, down from the peak of $2.7 billion a few weeks ago.
The Fidelity Wise Origin Bitcoin Fund (FBTC) had inflows worth $380 million last week, down from $1.4 billion in the first week of March.
Therefore, a combination of GBTC outflows and the slow growth of other funds has hurt the price of Bitcoin. This explains why the price has dropped from a high of $73,500 to $69,000.
Further, technically, Bitcoin is in the final stages of the triangle formation on the daily chart, as shown below. This means that the next price action could be a bullish breakout if bulls manage to move above the upper side of the triangle pattern.
US inflation data ahead
Meanwhile, Render Token, Arkham, and Dogwifhat tokens have crashed because of the upcoming US inflation data. Economists believe that the country’s inflation rose slightly in March, meaning that the journey to the Fed’s target of 2.0% is taking longer than expected.
The impact of higher inflation for longer is that the Federal Reserve could delay its interest rate cuts. In a statement this week, Jamie Dimon of JPMorgan warned that the Fed could also push rates to 8% if inflation remains stubbornly high.
Raphael Bostic, a Fed official, has hinted that just one rate cut would be appropriate, Cryptocurrency prices tend to do well when the Fed has a dovish view of the market.
The Federal Reserve will also publish minutes of its March meeting, which will provide more colour about the state of the economy. These minutes will also provide more information about what the committee deliberated on in March and their guidance.
Render Token and Dogwifhat prices dropped even as the cryptocurrencies made no headlines. Arkham, on the other hand, slipped after the network blamed a competitor for spreading false information about its activity. The statement said:
“One of the competitors stated that the total ARKM in vesting wallets is below the number in the tokenomics allocation. Vesting wallets will be deployed over time as we receive addresses from less crypto-native investors and as new hires are made and receive token compensation. “
Arkham is one of the biggest players in the crypto analytics industry. The company provides a free platform where users can view crypto transactions as well as wallet holdings.
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