The crypto market is holding steady this week despite the soaring crude oil price, which is risking a prolonged period of high interest rates in the United States.
Crypto market boosted by soaring ETF inflows
In theory, this should have been a bad week for the crypto market as crude oil price has continued soaring.
Data shows that Brent, the global benchmark, has jumped from $85 last week to $106 today, and a forming bullish flag pattern points to more gains. The West Texas Intermediate (WTI) has also jumped to $98 today.
Energy prices are soaring as investors wait for Donald Trump’s next move on Iran. In a statement this week, he gave the Iranians an open-ended ceasefire that will be accompanied by the blockade of the Strait of Hormuz.
The new statement came as the Iranians refused to show up for talks in Pakistan despite the US delegation being ready for the trip.
Therefore, the soaring crude oil prices mean that US inflation will remain at an elevated level in the foreseeable future, making it hard for the Federal Reserve to cut interest rates as most analysts were expecting earlier this year.
One reason why Bitcoin and the broader crypto market have done well this week is that investors are buying the dip. Bitcoin whales have boosted their buying spree this week.
Similarly, the top crypto ETFs have continued to add assets this week. Spot Bitcoin ETFs added $223 million in assets on Thursday, bringing the weekly gains to $809 million.
They have now added $2.4 billion in assets this month, much higher than the $1.3 billion they added last month. And there are four more days to go this month, meaning that they may cross the $3 billion mark.
Similarly, spot Ethereum ETFs have added over $131 million in assets this week and $516 million this month. This surge has brought the cumulative inflows since inception to $12 billion.
Spot XRP ETFs have added $9.3 million this week and $75 million this month, while Solana funds added $10 million.
The ongoing crypto ETF inflows are sending a sign that institutional investors are in accumulation mode, expecting the prices to rebound.
Crypto Fear and Greed Index has jumped
Meanwhile, the crypto market has held steady amid the ongoing sense of greed in the industry.
Data compiled by CoinMarketCap shows that the Crypto Fear and Greed Index has jumped to the green zone of 62. The index was trading at the extreme fear zone of 10 a few weeks ago.
The rising fear and greed index is a sign that investors have embraced a risk-on sentiment, where they are willing to take more risk.
A good example of this is in the crypto futures market, where the open interest has jumped to over $123 billion. The rising open interest is a sign that investors are using leverage to execute trades.
At the same time, the most aggressive crypto buyers have continued to accumulate their coins. Michael Saylor’s Strategy has now bought over 815k coins, while BitMine has bought over 5 million Ethereum tokens.
Technicals also explain why the crypto market has held steady despite the recent KelpDAO hack and RaveDAO Coin market manipulation.
Bitcoin has formed an ascending triangle pattern and moved above the 50-day moving average, pointing to more gains. These patterns point to more gains in the coming weeks.
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