Cautious Bullishness in Bitcoin & Crypto Amid Warnings of Further Downsides
The crypto market saw modestly higher prices on Monday, despite warnings from analysts and institutional investors that the market could fall further as contagion from recent insolvencies continues to spread.
As of Monday at 16:17 UTC, bitcoin (BTC) traded at USD 19,819, up 4% for the past 24 hours but down 7% for the past 7 days. Meanwhile, ethereum (ETH) stood at USD 1,115, up almost 6% for the day and down 9% for the week.
The uptick in crypto prices came while the crypto research and investment firm CoinShares reported an increase in capital flows to the new short bitcoin exchange-traded fund (ETF) known as BITI.
In total, short bitcoin funds saw inflows of USD 51.4m last week, indicating increasing bearishness towards the number one cryptoasset among investors who prefer these more traditional investment vehicles.
The short bitcoin inflows made up the vast majority of total crypto fund inflows for the week, with only USD 4.9m flowing into ETH-backed funds and USD 4.4m flowing into crypto multi-asset funds.
Compared to the week before, last week’s inflows mark an improvement from the record USD 423m outflows – even though most of last week’s inflows went into the new short bitcoin ETF.
Commenting on the state of the crypto market on Sunday, the Singapore-based crypto trading firm QCP Capital said its “positive outlook is waning,” while adding that they are “convinced” that any near-term upside will be capped.
According to the firm, the main reason for this bearish outlook is earlier comments from US Federal Reserve (Fed) Governor John Williams about the need to “get real rates above zero,” and the fact that quantitative tightening (QT) started in the US on June 15 and is set to be ramped up further going forward.
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