Bitcoin remains below the $90,000 mark, affected by a cautious market outlook as investors await the US Federal Reserve’s (FED) imminent interest rate announcement.
Market analysts suggest that rising macroeconomic and political uncertainties are causing investors to shy away from taking risks, leading to a significant slowdown in cryptocurrency trading activity.
Recent figures indicate that Bitcoin is hovering around $87,900, reflecting a decline of roughly 4 percent over the past week. After an initial surge at the start of January, prices have pulled back towards the $80,000 range.
The Market Pulse report from Glassnode highlights that while spot trading volumes have stabilized at low levels, this suggests more of a consolidation phase rather than any robust upward movement.
The report further notes that market conditions across spot trades, derivatives markets, and on-chain metrics are becoming increasingly defensive. Ongoing selling pressure coupled with heightened demand for hedging strategies is contributing to overall market fragility. Analysts at Glassnode assert that any meaningful recovery hinges on reduced selling pressure and an uptick in demand.
A similar trend is evident among institutional investors. Last week saw global crypto exchange-traded products (ETPs) experience outflows totaling $1.7 billion; additionally, US spot Bitcoin ETFs faced net outflows for five consecutive days. This withdrawal of over $1.3 billion aligns with declining prices as Bitcoin has dropped more than 10% from its mid-January peak near $97,850.
From a macroeconomic perspective, many investors view Bitcoin’s current position beneath $90K as an adjustment in interest rate expectations rather than weak demand signals. Jimmy Xue—co-founder of Axis—points out that prolonged expectations for “high interest rates until 2026” have set higher benchmarks for riskier assets like Bitcoin which now competes against US Treasury bonds yielding nearly 4 percent.
Geopolitical instability alongside renewed concerns about potential government shutdowns and trade tariffs are prompting many investors to seek refuge in safer assets such as gold and silver. Gracie Lin—the CEO of OKX Singapore—observes increased sensitivity within the market regarding news headlines; thus suggesting short-term volatility or sideways movements for Bitcoin may be expected.
Conversely, prevailing market sentiment indicates anticipation that there will be no changes to Fed policy during this meeting; CME FedWatch data shows a staggering 97 percent likelihood of maintaining current rates. This implies that short-term trends for Bitcoin will likely be influenced more by overall liquidity conditions and investor risk appetite rather than solely by decisions made by the Fed.
*This content does not constitute investment advice.*