On April 1st, the total flows for all nine US spot Bitcoin ETFs turned negative, indicating a worrying trend for investors. Particularly, Grayscale's spot Bitcoin ETF, GBTC, experienced outflows exceeding $300 million, significantly contributing to the overall net outflows from ETFs.

ETF Downtrend Impact on Bitcoin and Altcoins

Data on April 1st showed substantial activity in spot Bitcoin ETFs, with a total net outflow of $85.84 million. BlackRock's spot Bitcoin ETF, IBIT, saw a net inflow of $165 million, while Fidelity's FBTC had a net inflow of $43.99 million. Despite the recent negative trend, cumulative net inflows for spot Bitcoin ETFs remained impressive at $12.04 billion, indicating sustained investor interest in this asset class.

The recent decline in ETF flows also caused a sharp drop in Bitcoin's price, plummeting by 5.5% to $66,000. This decrease impacted the overall crypto market, resulting in significant liquidations within the last 24 hours. Interestingly, this drop happened close to the 4th Bitcoin block reward halving event, expected in just 19 days, challenging the expected BTC price of $75,000 by the halving event.

Investors' Focus Shifts to Federal Reserve's Actions

The recent downturn and loss of momentum in the crypto market might be connected to ongoing inflationary pressures in the US, causing a more cautious approach in global markets. Consequently, investors' hopes for a looser monetary policy and interest rate cuts by the Fed are diminishing. Stefan von Haenisch, a trading manager at OSL SG Pte in Singapore, pointed out that the expectations of the Fed reducing interest rates are being closely watched in the crypto market and are influencing market behavior.

This cautious sentiment is evident in the downturn seen in the crypto market, affecting various sectors, including altcoins like memecoins, which have surpassed Bitcoin's performance in the past six months, being notably impacted by this change in market sentiment.