Bitcoin Drops $45K Following Hawkish Fed; Buying Activity Still Positive
Bitcoin (BTC) plunged to $45K support on Wednesday morning. That’s despite on-chain data showing positive buying activity. The crypto exhibits weakness, changing hands near $44,767.71 at this publication, reflecting a 4.21% 24-hour decline.
BTC declines emerged amid a global crash following hawkish comments by the US Fed Reserve. Lael Brainard, Fed Governor, hinted at central bank balance sheet trimming in May as he stated that curbing inflation remained paramount. That triggered sell-offs within the market as traders worried a restrictive atmosphere might lead to economic downturns.
The tech-heavy NASDAQ lost 2.26%, whereas S&P 500 dropped 1.25% on Tuesday. The downbeat mode extended to Asa today morning, as Hong Kong’s Hang Sen declined by 1.15%, whereas Japan’s Nikkei 225 surrendered 1.4%.
Bitcoin’s weakness translated to a broader decline in the cryptocurrency market. ETH, SOL, and XRP lost 5% within the past day, whereas DOT and AVAX dropped more than 6%. Dogecoin remained the only gainer among the top assets, taking advantage of Elon Musk’s move to join the Twitter (TWTR) board, which somewhat means a positive signal for the original meme coin.
BTC’s drop emerges a week after hitting 3-month peaks of $48,000. The crypto dropped to $44,500, a zone that witnessed buying activity for the 2nd time this week. That meant a break beneath the $44.5K level might see BTC plunging to $43K.
BTC Inflows Surge
Bitcoin witnessed increasing buying activity amid institutional demand despite volatile price action over the past couple of weeks, according to analytic platform Glassnode. Inflows into Canadian ETFs wrapped WBTC, and overall investor accumulation on-chain remained historically steady, especially after the local lows formed on January 22, Glassnode revealed.
Data indicate cryptocurrency exchanges witnessed significant crypto outflows. For instance, Bitcoin records nearly 96,000 BTC outflows every month. Glassnode added that such activity reflects massive accumulation in play.
In Canada, BTC ETF continued to witness inflows, holdings surging by 6,594 BTC (more than $300M at the current price) since 2022 January (Glassnode data). For now, Canadian ETFs hold about 69,052 BTC. Exchange-traded funds are investment security that investors can trade like stocks, but they do not own the underlying asset. Some believe ETF demand surged amid political tension during the Russia-Ukraine conflict.