Bitcoin (BTC) defied expectations and experienced a significant price increase of 12% on March 21 following the recent Federal Open Market Committee (FOMC) meeting. This positive movement comes amidst a period of net outflows from Bitcoin exchange-traded funds (ETFs) totaling nearly $260 million.
Source: TradingView
BTC Price Surged Higher in Response to the FOMC Outlook
Following a dramatic comeback the previous day, data from Cointelegraph and TradingView indicated consolidation within a narrow range. Bitcoin's positive reaction coincided with commentary from the United States Federal Reserve, opting to maintain interest rates at their current levels.
Source: Matthew Hyland
Fed Chair Jerome Powell's remarks suggested a potential future rate cut, stating it would be "appropriate" later in the year. However, the Federal Open Market Committee (FOMC) emphasized that such a move would depend on achieving greater confidence in inflation reaching a sustainable level of 2 percent, as reiterated in an accompanying press release.
BTC/USD managed to sidestep another retest of the $60,000 support level, rallying instead to $68,000 and completely erasing previous losses.
Short sellers faced inevitable losses during this upward movement. According to data from monitoring platform CoinGlass, total liquidations of short BTC positions amounted to $70 million on March 20.
BTC liquidation | Source: CoinGlass
Read more: Bitcoin Experienced Over 8% Decline in Its Largest Single-Day Drop Since FTX Collapse
Bitcoin ETFs Experienced a Third Consecutive Day of Outflows
With new outflows from US spot Bitcoin exchange-traded funds failing to significantly impact sentiment. According to the latest data from UK-based investment firm Farside, $261 million exited the new ETF products on March 20, primarily driven by $386 million in outflows from the Grayscale Bitcoin Trust (GBTC).
Source: Farside
Despite this, other ETFs witnessed inflows, although these were substantially lower compared to previous daily revenue earlier in the month. Market observers remained optimistic, interpreting Bitcoin's lack of response to the outflows as a sign of resilience to ETF pressures.
Source: twitter.com/CryptoParadyme
Popular commentator Dyme suggested that Bitcoin's rebound despite negative inflows indicated a reduced dependence on ETFs to drive upward movement. Similarly, Samson Mow, CEO of crypto adoption firm Jan3, predicted that even GBTC would eventually see net inflows as the norm, advising investors to plan accordingly.
Website: https://www.bitrue.com/
Sign Up: https://www.bitrue.com/user/register
Disclaimer: This response provides information based on available data and general analysis. It does not constitute financial advice. Always perform your own due diligence and consult with a professional financial advisor before making investment decisions.