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Spot Bitcoin ETFs experienced a significant surge in inflows on March 20, skyrocketing over 1,300% in a single day after the U.S. Federal Reserve opted to keep interest rates unchanged. This decision helped ease market concerns about inflation and broader economic uncertainties, driving renewed interest in Bitcoin-focused investment products.

Massive Inflows into Spot Bitcoin ETFs

Data from SoSoValue revealed that 12 spot Bitcoin ETFs collectively attracted $165.75 million in net inflows on Thursday, a dramatic increase compared to just $11.8 million the previous day. This marked the fifth consecutive day of positive inflows, with nearly $700 million pouring into Bitcoin ETFs over this period.

Leading the charge was BlackRock’s IBIT, which witnessed a staggering $172.14 million in net inflows, recovering from a day of stagnant activity. Other notable players, including VanEck’s HODL, Fidelity’s FBTC, and Grayscale’s mini Bitcoin Trust, also recorded gains of $11.9 million, $9.19 million, and $5.22 million, respectively.

Mixed Results Across Funds

Despite the overall positive trend, not all funds benefited. ETFs like Bitwise’s BITB, Grayscale’s ETHE, and Franklin Templeton’s EZBC saw combined outflows totaling nearly $32.7 million. This highlights varied investor sentiment across different fund providers, even amid a broader market uptick.

Market Conditions Fuel Renewed Interest

The surge in ETF demand follows a challenging five-week stretch of outflows, driven by concerns over geopolitical tensions, trade uncertainties, and macroeconomic instability. However, the Federal Reserve’s decision to hold interest rates steady during Wednesday’s meeting provided much-needed relief to investors.

“Fed Chair Jerome Powell’s dovish tone suggested that inflationary pressures might be temporary, opening the door to future rate cuts and sparking optimism in risk-on markets like cryptocurrency.”

In response, Bitcoin’s price surged 4.5%, reaching $85,786 and briefly touching $87,431. Other major cryptocurrencies like Ethereum and Solana also joined the rally, posting gains of 4% and 6%, respectively. The total crypto market capitalization rose 3% to $2.947 trillion, while futures markets saw $355 million in liquidations, primarily from short positions.

Regulatory Boost Adds Momentum

Adding to the bullish sentiment, the U.S. Securities and Exchange Commission (SEC) announced that mining activities for Proof-of-Work cryptocurrencies such as Bitcoin, Litecoin, and Bitcoin Cash would not fall under current securities laws. This clarification provided further confidence for investors eyeing regulated crypto exposure.

Bitcoin’s Current Market Performance

At the time of writing, Bitcoin was trading at $84,165, down 2% in the last 24 hours. While ETF inflows indicate growing demand, analysts remain divided on Bitcoin’s short-term outlook.

Technical Levels to Watch

Analyst RJT_WAGMI highlighted that Bitcoin is currently testing a critical technical zone, grappling with a descending trendline, the 100-day moving average, and the Ichimoku Cloud. A breakout from this range could trigger a strong rally, while rejection might lead to a downside move.

“Bitcoin is challenging key resistance levels, and its next move will likely define the short-term market direction,” RJT_WAGMI explained.

Long-Term Trends and Market Sentiment

Trader Great Mattsby offered a broader perspective, noting that Bitcoin continues to track within a long-term upward logarithmic trend channel. This suggests the next major peak might not arrive until 2025-2026, leaving room for gradual growth in the interim.

On the macroeconomic front, CryptoQuant CEO Ki Young Ju provided additional insights, emphasizing that while retail demand for Bitcoin remains robust, particularly through ETFs, it doesn’t fully translate to on-chain activity as it once did. He believes the current bull cycle may technically be over, but not in a crash sense. Instead, it could take another 6 to 12 months for Bitcoin to surpass its all-time highs due to tight liquidity and broader economic challenges.

Despite the mixed opinions, the resurgence of inflows into spot Bitcoin ETFs highlights growing investor interest in regulated crypto investment vehicles. As the market continues to evolve, Bitcoin’s performance will remain a focal point for both retail and institutional investors.

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