Bitcoin Falters at $65,000 as War Escalates and ETFs See Outflows

The price of Bitcoin has failed to break through $65,000 on multiple occasions in recent days, sparking concerns that another decline is imminent. Several factors are contributing to this bearish outlook.

One reason is the US central bank's decision to leave interest rates unchanged, a move that has historically been followed by a correction in Bitcoin's price. The latest FOMC meeting was no exception, with popular analysts noting a $3,000 price decline over the past few days. While the Friday correction to a 2-week low of $62,400 may have priced in this expected post-FOMC retracement, further declines are still possible.

Another macro factor that could harm risk-on assets like Bitcoin is the escalating war in the Middle East. Tensions rose over the past 24 hours, with reports of Iranian strikes on US-escorted tankers in the Strait of Hormuz. The WSJ claimed that Trump has ordered a fresh attack on Iran to force it to surrender.

Internal reasons for the potential decline include the recent behavior of Bitcoin ETFs. After attracting over $200 million in net inflows, investors pulled out $61.53 million last week, followed by a significant $265 million withdrawal on Friday. Additionally, analyst Ali Martinez warned that the TD Sequential has flashed a major sell signal on the 3-day chart, which may indicate a price reversal.

However, not all analysts share this bearish view. Michaël van de Poppe noted that Bitcoin's historical connection with the Nasdaq and South Korea's KOSPI could be indicative of a potential rebound. He pointed out that both indices skyrocketed at the end of the business week, with KOSPI surging by 18%, and reminded readers that a similar scenario in the past led to a price rally to $83,000.