Is the Crypto Rally Beginning to Lose Steam?
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Is the Crypto Rally Beginning to Lose Steam?

Story Highlights

Cryptocurrencies have been rallying over the past year. However, signs are emerging that the rally may be losing steam.

The broader crypto market has been buoyant recently, with Bitcoin (BTC-USD) and Ethereum (ETH-USD) rallying by 167% and 113%, respectively, over the past year. However, emerging telltale signs indicate that the crypto rally may be beginning to lose steam.

Subdued Sentiment For Bitcoin

On Wednesday, Bitcoin jumped by nearly 4.5% after a soft inflation print in the U.S. However, the largest cryptocurrency in the world is down by nearly 3% over the past five days, even after the U.S. Fed signaled that a rate cut was on the cards this year.

Similarly, Ethereum is down by around 4% over the past five days despite the Fed’s verdict and the SEC’s indication of approval for spot ETH ETFs this summer. Even former U.S. President Donald Trump’s stance that all Bitcoin mining should be done in the U.S. has largely failed to buoy crypto prices this week.

Ominous Data

Two data prints seem to confirm the potential downturn in crypto. Spot BTC ETFs recently experienced outflows for the first time in weeks. According to Farside Investors, the outflows were nearly $200.4 million on Monday and $226.2 million on Thursday.

Moreover, Robinhood Markets (NASDAQ:HOOD) reported a 30% sequential drop in its crypto notional trading volumes for May. This is a major indicator of waning interest in crypto, at least in the short term.

Is Bitcoin Expected to Rise or Fall?

The current chart setup for BTC suggests that any price gains could be short-lived while traders scout for new catalysts for the rally to continue.

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