Bitcoin's rally fizzles as macro uncertainties and ETF outflows weigh on price

Bitcoin's recent rally above the $90,000 mark has been short-lived, with the cryptocurrency struggling to maintain its momentum. Analysts attribute this to ongoing macroeconomic uncertainties and a significant reduction in institutional investments in cryptocurrency markets. Bitcoin briefly recovered to above $95,000 on March 2 before forming a double-top chart pattern around $94,200, indicating an imminent price decline. The cryptocurrency bottomed around $81,400 the following day and has since been struggling to remain above the $90,000 mark.

Multiple factors are contributing to Bitcoin's slump, with a significant one being the US spot Bitcoin exchange-traded funds (ETFs). Significant outflows from these ETFs have amplified selling pressure, as institutional investors pulled back, likely reacting to macroeconomic uncertainties and shifting risk sentiment. The US spot Bitcoin ETFs have seen their fourth consecutive week of net negative outflows, recording over $2.6 billion worth of cumulative net outflows during the last week of February.

Beyond ETF inflows, macroeconomic factors are also pressuring Bitcoin’s price action. New tariff announcements from the US have heightened concerns about inflation and economic stability, prompting investors to favor safer assets over risk-on investments like Bitcoin. Despite these challenges, analysts remain optimistic about Bitcoin’s price trajectory for late 2025, with price predictions ranging from $160,000 to above $180,000.

Some of the concerns related to a global trade war may be alleviated with upcoming announcements. The implementation of US tariffs has weighed on crypto markets, leading to declines in digital assets and traditional equities. However, long-term optimism has overpowered short-term unease after indications that a deal to reduce tariffs on certain countries could be announced soon. Trade policy uncertainty will likely keep sentiment guarded, while the increased likelihood of Federal Reserve rate cuts may suggest a potential turnaround for crypto markets.

The wider crypto market is still recovering from a significant hack, which occurred earlier this year, marking one of the largest hacks in crypto history. This event has added to the overall uncertainty and volatility in the market, further impacting Bitcoin's price action. Despite these challenges, the market remains resilient, with investors closely monitoring developments and adjusting their strategies accordingly.