Also Ethereum’s Lagging Performance Signals a New Market Structure & The Fed’s Tone Is Normalizing, That’s All Markets Need to Hear

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	Forwarded this email? Subscribe here for more Bitcoin ETF Inflows Hold Steady Through Market Turbulence Also Ethereum’s Lagging Performance Signals a New Market Structure & The Fed’s Tone Is Normalizing, That’s All Markets Need to Hear Ecoinometrics Jun 27   READ IN APP   Welcome to Ecoinometrics' Friday edition. Each week, we analyze the three most critical market signals impacting Bitcoin and macro assets, delivering institutional-grade insights through data-driven charts and analysis. Today we'll cover: Bitcoin ETF Inflows Hold Steady Through Market Turbulence Ethereum’s Lagging Performance Signals a New Market Structure The Fed’s Tone Is Normalizing, That’s All Markets Need to Hear Markets are adjusting to a new regime where institutional flows are now the dominant force behind Bitcoin’s rally. Ethereum, once a close follower, is losing ground. And the Federal Reserve is guiding expectations of a soft landing if only at a glacial pace. The old crypto playbook is being rewritten. What matters now is who’s steering the flow of capital, and where it’s going. In case you missed it, here are the other topics we covered this week: What ETF Flows Reveal About Bitcoin’s Short-Term Outlook Ecoinometrics · Jun 23 Read full story Bitcoin Stalled With Stocks: Correlations Are Holding It Back Ecoinometrics · Jun 25 Read full story Essential Decision-Making Tools Bitcoin Market Monitor - Key Drivers in Five Charts: Bitcoin Market Monitor Ecoinometrics · November 18, 2024 Read full story Bitcoin Market Forecast - Probability Scenarios & Risk Metrics: Bitcoin Market Forecast Ecoinometrics · December 6, 2024 Read full story Get these professional-grade insights delivered to your inbox: Upgrade to paid Bitcoin ETF Inflows Hold Steady Through Market Turbulence What happened over the past two weeks is a good example of why tactical investment decisions shouldn’t rely solely on price action. Geopolitical tensions weighed on markets and even pushed Bitcoin briefly down to $98K. That might have looked like weakness if you only pay attention to the price. But under the surface, the picture was different. Bitcoin ETFs recorded 10 consecutive trading days of inflows. These aren’t record-setting flows, but the consistency is what matters. It’s a clear sign that institutional demand remains intact, unmoved by short-term volatility. At the current pace, ETF inflows support Bitcoin in the $105K to $125K range. Now that tensions are easing and the NASDAQ is rebounding, some of the pressure on Bitcoin’s price is lifting. That improves the odds of an upside move to a new all-time high. Bitcoin ETFs logged 10 consecutive days of inflows even as global tensions pushed the price down to $98K, and the streak continues. That’s highlighting resilient institutional demand. Ethereum’s Lagging Performance Signals a New Market Structure Since the bottom of the last bear market, Bitcoin is up nearly 500%, reaching several new all-time highs in the process. In past cycles, Ethereum would have followed that momentum. As the second-largest cryptocurrency, it has historically tracked Bitcoin closely. And during late bull market phases it has even managed to outperform. But that’s not happening this time. Ethereum hasn’t made a new all-time high. And over the last 12 to 18 months, it has steadily lagged behind. This is a clear divergence from historical behaviour and you can argue that it began a few months after the launch of the Bitcoin ETFs. Coincidence? Probably not. This time, the capital driving Bitcoin’s rally is coming from traditional finance. These investors aren’t buying into the broad crypto story, they’re buying into Bitcoin specifically. Ethereum ETFs are live now, but they haven’t seen the kind of demand Bitcoin ETFs attracted. The investor base for Ethereum and Web3 platforms is structurally different from the one allocating to Bitcoin through ETFs. Unless Ethereum can renew its narrative capital will remain concentrated at the top of the food chain. Stablecoins may be an exception due to their distinct economic model. But for the rest of the crypto ecosystem, this is a tough environment. Bitcoin is up nearly 500% since the bear market bottom. Ethereum, despite its size, has failed to keep pace. That’s highlighting a structural break in capital flows within crypto. The Fed’s Tone Is Normalizing, That’s All Markets Need to Hear As expected, the Federal Reserve held rates steady at the June 18 FOMC meeting. This time, Jerome Powell returned to a more hawkish tone during the press conference. That’s a notable shift from May, when Powell’s comments were unexpectedly dovish. At the height of U.S. tariff tensions, he emphasized downside risks to the economy, and our Fed Communication Index (FCI) reflected that with a clear drop in sentiment (the first reading on the dovish side since 2022). But the FOMC minutes from that May meeting remained hawkish, so anyway this dovish tone from Powell was more an anomally than a real change in trajectory. This month’s press conference confirms that. Powell is back on trend. And that trend is one of slow, steady normalization. The Fed’s tone is moving closer to neutral, just as inflation slows and the pace of rate cuts remains cautious. The message is clear: the Fed is managing this soft landing deliberately. For Bitcoin, the specifics don’t matter much. As long as the Fed keeps pointing toward an eventual end to QT, markets are prepared to look through the timing. After a dovish deviation in May, the Fed’s tone has returned to its broader trend, normalizing slowly, in line with inflation and policy expectations. That's it for today. Thanks for reading. Cheers, Nick P.S. Every week, our team conducts extensive research analyzing market data, tracking emerging trends, and creating professional-grade charts and analysis. 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