Recently, the U.S. stock market has been booming, rising for five consecutive days and continuously hitting new highs. However, the cryptocurrency market seems unaffected, with Bitcoin and Ethereum not only failing to rise but also experiencing slight declines. This is quite unusual, and everyone is pondering the reasons behind it.
On the surface, it seems like the prices of cryptocurrencies have not moved much, but the data hides a secret—money for Bitcoin ETFs is flooding into the market. Bitcoin ETFs have net bought for 20 consecutive days, with as much as 500 million coming in on some days and at least 200-300 million on others; Ethereum ETFs have also been net buyers over the past month, with the most substantial day seeing 200 million inflows.
So why is the money coming in, yet the prices aren’t rising? The key lies in the drop in trading activity. Now, the trading volume on major exchanges has significantly shrunk, and spot trading is becoming as quiet as the lows seen in July and August of last year. The market feels like it has been muted, with participation down by more than half.
In this situation, Bitcoin at least has ETF funds to support it, allowing it to maintain some stability; smaller cryptocurrencies without the backing of large funds are suffering severely, dropping the hardest when liquidity tightens.
Looking ahead, the market is likely to remain volatile for a while. The Federal Reserve has recently hinted that there may only be one rate cut this year, and it is likely to happen after September. This means the market will continue to fluctuate, without any calm in sight.
However, investors should remember that opportunities often hide when no one is paying attention. The current market fear index is still at a mid-level position, far from the point where everyone panics. If one is optimistic about the long-term opportunities that interest rate cuts in 2025 and 2026 might bring, Bitcoin could be a relatively stable choice.
In this market, investors need to stay calm, closely monitor market movements, and prepare for a protracted battle. This strange phenomenon of “not rising when it should” in the crypto market might hide significant changes in the future, warranting our attention and contemplation.
Market trends never believe in flowery language; following precise strategies is the only way to tap into the pulse of wealth, and those without a plan should keep up with the pace.
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