Bitcoin’s Rally Fades Amid Macroeconomic Uncertainty and ETF Outflows
Bitcoin's recent surge above $90,000 proved short-lived as macroeconomic uncertainties and significant ETF outflows weigh on the market.
Bitcoin's Volatile Ride
Bitcoin (BTC) staged a near 10% recovery to above $95,000 on March 2, forming a double-top chart pattern around $94,200, which typically signals an imminent price decline. The following day, Bitcoin bottomed at around $81,400 and has since struggled to remain above the $90,000 mark, according to TradingView data.
Factors Contributing to the Slump
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Significant ETF Outflows: US spot Bitcoin ETFs have seen their fourth consecutive week of net negative outflows, with over $2.6 billion in cumulative net outflows during the last week of February, according to Sosovalue data. This trend indicates that institutional investors are pulling back, likely due to macroeconomic uncertainties and shifting risk sentiment.
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Macroeconomic Concerns: New tariff announcements from President Trump have heightened concerns about inflation and economic stability, prompting investors to favor safer assets over risk-on investments like Bitcoin, according to Ryan Lee, chief analyst at Bitget Research.
Analysts' Outlook
Despite the current challenges, analysts remain optimistic about Bitcoin's price trajectory for late 2025, with price predictions ranging from $160,000 to above $180,000. Rising Bitcoin activity and potential market bottoms hint at a potential reversal, according to recent reports.
Tariff Concerns and Market Sentiment
Iliya Kalchev, dispatch analyst at digital asset investment platform Nexo, suggests that some of the concerns related to a potential 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 won over short-term unease after US Commerce Secretary Howard Lutnick indicated that a deal to reduce tariffs on Canada and Mexico could be announced as early as Wednesday.
Broader Crypto Market Recovery
The wider crypto market is still recovering from the $1.4 billion Bybit hack on February 21, marking the largest hack in crypto history. 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.
