Bitcoin Price Recovery Halted by ETF Outflows and Elevated Rate-Hike Bets

Bitcoin's price recovery faces headwinds from institutional demand weakness and elevated Federal Reserve rate-hike bets.

Last week, spot Exchange Traded Funds (ETFs) recorded over $462 million in net outflows, breaking a three-week inflow streak. This decline in institutional demand comes as traders are currently pricing in an 86% chance that the Fed will raise borrowing costs at the end of its two-day meeting on Wednesday.

The US Dollar (USD), which has benefited from persistent geopolitical uncertainties and hot inflation figures, continues to support its safe-haven status. This could limit Bitcoin's upside potential as it trades around $78,226, just below the 50-week Simple Moving Average (SMA) at $78,761.

On the technical side, if Bitcoin fails to overcome this resistance and corrects, it could extend its decline toward the key psychological level of $70,000. However, if it recovers and closes above the 50-week SMA on a weekly basis, it could extend its rally toward the 50% Fibonacci retracement level at $87,599.