Bitcoin Recovers from 4% Weekly Loss but Rate Hike Fears Persist
Bitcoin's price has recovered slightly after falling over 4% last week, but it still faces pressure from rising rate-hike bets and geopolitical uncertainty. The cryptocurrency is trading above $78,200 as of Monday morning.
The recovery was driven by weaker institutional demand, with US spot Bitcoin exchange-traded funds (ETFs) recording net outflows of over $462 million last week. This ended a three-week streak of inflows, which may indicate that investors are becoming less confident in the market.
Macroeconomic factors continue to weigh on Bitcoin's price, with hotter inflation data released last week increasing expectations that the US Federal Reserve will raise interest rates. The CME FedWatch Tool shows that traders are pricing in a probability of over 86% that the Fed will hike borrowing costs at its upcoming meeting.
Geopolitical uncertainty in the Middle East is also supporting the US dollar, which is limiting Bitcoin's upside potential. The Federal Reserve's decision this week will be closely watched by markets, with investors expecting a high probability of an interest rate hike.