Bitcoin News Today: Bitcoin ETFs Post $338M Outflow as Fed Rate-Cut Bets Fuel Uncertainty

Bitcoin is facing renewed pressure as on-chain inflow weakens and market sentiment remains fragile. Institutional demand has declined sharply, with spot ETFs recording their largest weekly outflow since November 21. The drop in inflows has intensified concerns about further price correction amid a broader risk-off environment.

Meanwhile, corporate activity has remained mixed. Strategy Inc. (MSTR) added another 10,645 Bitcoin to its holdings this week, continuing its aggressive accumulation strategy. This move contrasts with the broader market's struggles, highlighting divergent views on the cryptocurrency's long-term potential.

Market participants are now closely watching the Fed's next move after the latest CPI data showed a slower-than-expected rise in inflation. With the headline CPI at 2.7% year-on-year and core CPI at 2.6%, speculation is growing that the Fed may cut interest rates sooner than anticipated. A rate cut could potentially fuel risk-on sentiment and support a Bitcoin rebound.

On-Chain Indicators Suggest Prolonged Weakness

The weakening on-chain inflow signals deeper structural shifts in institutional demand. According to SoSoValue data, Bitcoin ETFs saw a net outflow of $338.81 million last week, breaking a recent streak of positive flows. If this trend continues, it could pressure the price further, particularly if hedging activity increases or macroeconomic conditions deteriorate.

The Fear and Greed Index has also dropped to 16, indicating an extreme fear level among traders. This reading aligns with falling prices, ETF outflows, and weak momentum, suggesting that the market remains in a risk-off phase. Additionally, on-chain data reveal that two Matrixport-linked wallets deposited 4,000 BTC into Binance, valued at $347.56 million. These movements could reflect hedging or liquidity management strategies but are unlikely to reverse the broader trend.

Corporate Confidence vs. Market Volatility

Despite the broader market's struggles, Strategy Inc. (MSTR) has continued to accumulate Bitcoin, purchasing 10,645 BTC this week for $980 million. This follows a similar purchase of 10,624 BTC in the previous week. The company's strategy underscores a long-term bullish stance, even as it has cut its 2025 earnings forecast amid market volatility. This divergence between corporate activity and market sentiment highlights the challenges in predicting Bitcoin's short-term trajectory.

Citi analysts have also weighed in, identifying $70,000 as a key support level for Bitcoin. As long as the price remains above this threshold, they believe upward momentum could remain intact, particularly if ETF-driven demand and equity market strength provide a base for further growth. However, this scenario depends on several factors, including regulatory clarity and macroeconomic stability.

What This Means for Investors

Investors are now navigating a market that is both volatile and uncertain. The recent outflows from ETFs and weaker-than-expected US inflation data have created conflicting signals. While a Fed rate cut could support Bitcoin, the broader risk-off environment remains a significant headwind.

Meanwhile, Bitcoin's Fear and Greed Index remains at an extreme fear level, indicating that retail and institutional investors are cautious. This sentiment is further reinforced by the outflows from spot ETFs and the cautious positioning of on-chain actors. Investors may need to brace for a prolonged period of consolidation, with meaningful price action potentially delayed until sentiment improves.

Risks to the Outlook

There are several key risks that could delay or derail a Bitcoin recovery. Persistent ETF outflows, regulatory uncertainty, and macroeconomic volatility could prolong the current weakness. Additionally, if the Fed signals a more hawkish stance than expected, it could weigh on risk assets, including Bitcoin.

On the positive side, the recent accumulation by corporate players like MSTR and the potential for Fed rate cuts provide some optimism. However, these factors are unlikely to drive a strong rebound in the near term. Investors should remain cautious, as the path to a sustained recovery may take longer than anticipated.