Bitcoin traded under slight pressure on Monday as market participants assessed a key U.S. inflation report and anticipated upcoming statements from Federal Reserve officials. At 10:37 AM GMT, Bitcoin fell by 1% to $96,251.
Federal Reserve Comments and Monetary Policy Forecasts
The flagship cryptocurrency struggles to gain momentum as investors adopt a cautious stance amid concerns over tighter monetary policy and its potential impact on risk assets. The latest U.S. Consumer Price Index (CPI) data for January indicated that inflation remains above the Federal Reserve’s 2% target, fueling speculation that the central bank may maintain its hawkish stance longer than previously predicted.
This scenario casts uncertainty over Bitcoin and other speculative assets, as high interest rates typically dampen investor appetite for risk. Traders are now closely monitoring upcoming Federal Reserve comments for insights into future monetary policy decisions. Any indications of prolonged rate hikes or delays in rate cuts could exert additional downward pressure on Bitcoin, which historically struggles in high-borrowing-cost environments.
Bitcoin continues to trade within a narrow range, reflecting market hesitation as investors await clearer macroeconomic signals.
ETF Outflows Signal Bearish Sentiment
Adding to bearish pressures, reports indicate that cryptocurrency exchange-traded funds (ETFs) have experienced significant outflows in recent days. Analysts attribute this trend to a combination of factors, including profit-taking after Bitcoin’s strong rally earlier this year, regulatory uncertainties, and a broader shift toward risk-off sentiment in traditional markets.
ETF outflows suggest that some institutional and retail investors are reducing their cryptocurrency exposure due to an uncertain macroeconomic landscape, reinforcing concerns about Bitcoin’s short-term trajectory.
Broader Crypto Market Declines with Bitcoin
Most altcoins also declined, mirroring Bitcoin’s movement amid waning risk appetite. Ethereum, the second-largest cryptocurrency, fell by 1.1% to $2,680.19. XRP dropped by 4.1% to $2.6724, while Solana slid 6.2%. However, Polygon recorded a 2% increase, and Cardano gained 3.1%. Among meme tokens, Dogecoin lost 3.2%, while $TRUMP declined by 5.7%.
Predicting Bitcoin’s Next Move
Market analysts forecast continued volatility in Bitcoin prices, with near-term movements likely influenced by macroeconomic developments and Federal Reserve guidance. If inflation remains stubbornly high, expectations of prolonged rate hikes could keep Bitcoin under pressure. However, should policymakers signal a shift toward easing monetary conditions, the cryptocurrency market could see renewed upward momentum. With investors closely monitoring economic indicators and central bank policies, Bitcoin’s trajectory remains subject to evolving market conditions and regulatory developments.
