Bitcoin Displays Potential Stability Amidst Global Economic Uncertainty
Bitcoin's Stability amid Global Economic Challenges
According to a recent post on Bitfinex Alpha , Bitcoin (BTC) has shown signs of potential stability amidst global economic uncertainty. The cryptocurrency achieved its highest daily close last week since April 12th, following a softer-than-expected Consumer Price Index (CPI) inflation report. BTC was up 7.54% on the day and 8.7% on the week. This increase was further supported by exchange outflows amounting to 55,000 BTC, indicating a supportive market sentiment and reinforcing the view that a bottom for the Bitcoin price has been reached.
Bitcoin ETFs Witness Net Inflows
Bitcoin Exchange-Traded Funds (ETFs) also saw net inflows of $948.3 million over the past week, reversing recent weeks of outflows. This trend suggests increased confidence in Bitcoin's stability, particularly as long-term holders maintain their positions and “new whales” accumulate BTC around the $60,000 mark, establishing it as a significant on-chain support level. Even short-term holders (STH), whose portion of the supply has increased from 19% at the beginning of the year to 26.1%, currently have an average cost basis of approximately $61,046, making this an essential level to maintain to avoid triggering sell-offs.
Global Economic Challenges
Despite these positive trends in the crypto market, the global economy continues to face challenges. The CPI report for April indicated some signs of disinflation, with a 0.3% month-on-month (MoM) increase and a 3.4% increase year-on-year (YoY). However, the Producer Price Index for April rose by 0.5% due to higher service costs, suggesting persistent inflation. The housing market and manufacturing sector also continue to face challenges, with builder sentiment dropping due to high mortgage rates and industrial production stagnating.
Crypto Regulation and Market Developments
On the regulatory front, Türkiye has introduced a legislative proposal to regulate crypto asset transactions. The bill, overseen by the Capital Markets Board, includes a licensing system for crypto firms and expanded regulatory oversight. Meanwhile, Pump.fun, a memecoin launchpad, experienced a $1.9 million exploit, allegedly by a former employee using flash loans. The breach led to a temporary halt in trading, and the platform restored affected liquidity pools within 24 hours.
Future Outlooks
The US Securities and Exchange Commission faces imminent deadlines for Ether ETF applications from VanEck and ARK. Approval appears unlikely due to the complexities of Ethereum's technology and ongoing legal uncertainties. The SEC's decisions could set important precedents for other digital assets in public markets. Despite these challenges, the cryptocurrency market continues to evolve, with Bitcoin leading the way in demonstrating potential stability amidst ongoing global economic uncertainty.
Image source: Shutterstock
Tags
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Circle rolls out Gas Station for Solana, enabling devs to pay user gas fees
Blockchain engineering group Equilibrium launches venture unit, raising over $30 million for first fund
Quick Take Equilibrium Group has launched Equilibrium Ventures, raising over $30 million for its first fund. The group has helped build several high-profile blockchains, including Ethereum, Solana and ZKsync, and Equilibrium Ventures looks to gain from that technical expertise.
