Bitcoin price stagnates amid uncertain economic outlook and threat of sell-off in seized BTC
Bitcoin price is experiencing a further slight decline, pressured by a combination of factors including strong US economic data, geopolitical tensions and the threat of a sell-off in seized BTC. The world's largest cryptocurrency is struggling to break above $64,000 as investors cautiously await the Federal Reserve's next moves. Aggressive interest rate cuts by the FED fade, weakening bitcoin and strengthening the dollar.
The breakout on the lower side of a bullish trident pattern suggests weakness in the BTC price in the near term. TradingView
BTC price was trading at $61,602.01 down 0.42% at the time of reporting.
Solid jobs data and monetary policy
Recent US jobs data showing a strong labor market. In addition, a rise in bond yields, which reinforced expectations that the Federal Reserve could be more cautious in reducing interest rates. This scenario strengthens the US dollar and puts pressure on risk assets such as cryptocurrencies. As aggressive rate cuts fade, Bitcoin could be pushed down.
Geopolitical crisis and oil prices
The geopolitical crisis in the Middle East pushed up oil prices, which could generate inflationary pressures and limit the Federal Reserve's room for maneuver. This situation of uncertainty generated risk aversion in financial markets, negatively affecting the price of Bitcoin.
Massive sale of seized Bitcoin
The decision of the Supreme Court of the United States to allow the sale of 69,370 Bitcoin seized in the Silk Road case represents an additional threat to the price of the cryptocurrency. This massive sale could exert significant downward pressure on the market.
Fed Expectations According to CME Group
Data from CME Group shows that expectations for an aggressive 50 basis point cut in interest rates by the Federal Reserve have faded. Currently, 86.1% of participants in the federal futures market are betting on a 25 basis point cut, while 13.9% anticipate that the Fed will keep rates unchanged at its next meeting. This lower expectation of monetary stimulus is positive for the dollar and negative for bitcoin.
Capital Outflow from Bitcoin ETFs
US spot bitcoin ETFs saw a cumulative outflow of more than $18 million in the last few days, according to data from SoSoValue. This trend suggests lower institutional demand for the cryptocurrency.
Bitcoin Neutral
Technically, Bitcoin is in a neutral zone, trading slightly below its 25-day moving average. The lack of a bullish catalyst and selling pressure have prevented Bitcoin from breaking above $64,000. Furthermore, the breakout of a bullish trident pattern suggests weakness in the near term.
The combination of these factors creates an environment of uncertainty in the crypto market, which has led investors to adopt a more cautious stance. Despite this, many analysts remain optimistic about the long-term future of Bitcoin.
Disclaimer: This information is provided for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making any investment decisions.