Bitcoin Falls Amidst Weakening Institutional Demand and Macro Pressures
Bitcoin has been struggling to gain traction amidst macroeconomic pressures. The cryptocurrency has fallen by more than 4% this week and is currently trading around $76,900. This comes as US spot Bitcoin exchange-traded funds (ETFs) are on track to end a three-week inflow streak after recording nearly $500 million in net outflows through Thursday.
The weakening institutional demand is a major concern for Bitcoin's short-term prospects. The data from SoSoValue suggests that the trend of withdrawals could intensify, leading to further price correction. If this continues, it may put additional pressure on the cryptocurrency.
The US Producer Price Index (PPI) data has strengthened expectations for an interest rate hike in September, which is also contributing to Bitcoin's decline. The probability of an interest rate hike at the September 15-16 meeting has risen to around 70%, according to the CME FedWatch Tool. Market participants are now awaiting the US Consumer Price Index (CPI) data on Friday for further signals on the Federal Reserve's monetary policy path.