Bitcoin Rally Falters as ETF Outflows Weigh on Sentiment Ahead of Fed Decision

Bitcoin's recent rally has lost steam after US spot Bitcoin ETFs recorded more than $465 million in combined outflows over two sessions, ending a seven-day inflow streak that supported the recovery. The reversal highlights institutional participation remaining cautious as investors await the Federal Reserve's policy decision later this week.

The market is focused on the upcoming FOMC meeting, US GDP and PCE inflation data, with expectations of a restrictive policy stance limiting demand for risk assets. Easing energy prices and lower Treasury yields have provided some relief across financial markets, allowing Bitcoin to stabilize. However, any renewed escalation in the Middle East could quickly revive risk aversion and increase volatility.

The daily chart reflects a fragile technical structure, with Bitcoin remaining below its major moving averages despite rebounding from around $60,000. A sustained move above the $66,000 to $67,000 resistance zone would improve the near-term outlook and expose the $70,000 area. Until then, the risks favor another test of support around $63,000 to $60,000.