Bitcoin price rose, surpassing $100,000 due to rising US CPI figures. Nonetheless, institutions are redeeming BTC spot ETF shares.
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This week has been uneven. The good news is that the price remains at the upper end of this month’s price range, which is a bullish indicator.
After falling below $90,000 earlier this week, the price rebounded significantly on Wednesday, January 15, surpassing $100,000 for the second time this month.
The last time this was printed was early last week when the price soared to $102,000 and then fell sharply to $91,000. Although the price is currently higher, it is unclear whether Bitcoin has fully recovered.
Interestingly, despite Bitcoin’s recent rally, institutional investors appear skeptical of its upward trend. And their caution is understandable.
Bitcoin Price Rises on Inflation Data
Bitcoin and financial markets are showing an unexpected rebound in response to mixed economic data from the United States.
Yesterday, the Labor Department reported that the Consumer Price Index (CPI) rose sharply for the first time in nine months, largely due to rising energy costs.
However, while inflation is increasing, underlying inflationary pressures appear to be easing. Most importantly, core inflation is slowing, which is a positive sign.
The report follows the Labor Department’s revelation that the Producer Price Index (PPI) rose more slowly than economists expected.
Analysts therefore concluded that the combination of a slowdown in core inflation and slower-than-expected PPI growth could cause the economy to cool and inflation to decline.
This suggests that the Fed, which adopted a hawkish stance at the December FOMC meeting, may not tighten monetary policy aggressively in the first quarter of 2025.
Bitcoin is becoming increasingly sensitive to monetary policy decisions, and its price can rise or fall depending on the path chosen by the Federal Reserve.
Signs of a “warming” economy should have a positive impact on traders, boosting demand and ultimately pushing Bitcoin above $100,000.
Technically, the uptrend remains intact and as long as BTC trades above $90,000, the price will likely remain within the bullish flag. A break above $108,000 could double down on bulls, pushing the world’s most valuable cryptocurrency towards $120,000.
(BTCUSDT)
Wall Street Is Skeptical About $100,000
Traders are optimistic and momentum is recovering after the price breached $100,000, but institutional demand for spot Bitcoin ETFs is waning.
Institutions appear to be redeeming their shares, according to Lookochain data.
(source)
On January 15, over 3,000 BTC worth $302 million was redeemed. In particular, BlackRock’s iShares also experienced an outflow of 2,274 BTC, or $224 million.
Additionally, on January 14, institutions continued to sell, withdrawing 2,244 BTC worth $216.1 million.
(source)
The fact that “big companies” are repurchasing their own shares suggests greater hesitation among institutional investors. With Bitcoin rebounding and Bitcoin ETFs experiencing outflows, this could indicate that they are taking profits or moving funds into other assets such as bonds.
This approach makes sense. After the November rally, the cryptocurrency market appeared overextended.
With ongoing market concerns, Wall Street may be cautious about investing too much amid ongoing economic uncertainty.
Nonetheless, this outlook could change if Bitcoin continues to rise and surpass $108,000.
Take a look: Stabilizing after XRP price crash: What are the best presales to buy in 2024?
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