IBIT

Bitcoin price revisits recent lows as the BTC futures premium falls to a 5-month low. Is the bull market over?

Bitcoin (BTC) price fell sharply on April 30 following the unimpressive launch of a spot BTC exchange-traded fund (ETF) in Hong Kong. Despite expectations of $140 million in demand, the total trading volume, including Ether (ETH) ETFs, on the opening day was just $12.4 million. As a result, the premium on Bitcoin futures dropped to its lowest level in five months, signaling a possible bearish outlook.

It is important not to rush to conclusions, as other factors have also weighed on Bitcoin’s price. These include diminished investor confidence in the ability of the United States Federal Reserve (Fed) to reduce interest rates twice in 2024. Fed Chair Jerome Powell is expected to deliver his post-meeting remarks on May 1, prompting cryptocurrency traders to exercise increased caution.

The fourth straight session of net outflows from U.S.-listed spot Bitcoin ETFs has raised concerns among traders. Investors have been withdrawing funds from the Grayscale GBTC ETF due to its high fees, while the Blackrock IBIT ETF has seen little activity. Therefore, despite the lackluster performance of the Hong Kong spot ETF, the appetite for such investments in the U.S. appears to be waning.

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