Bitcoin continued to swing near the levels seen during the last few days as investors adopt a more cautious stance amid renewed geopolitical uncertainty.
Fresh tensions in the Middle East could negatively affect broader market sentiment and reduce appetite for risk assets.
A strengthening of inflationary concerns could weigh on the market at a time when central banks are already maintaining a cautious tone, as higher bond yields create an unfavourable backdrop for non-yielding assets such as Bitcoin.
While the Federal Reserve is expected to keep interest rates unchanged, other central banks are likely to raise rates this year.
At the same time, the cryptocurrency could remain under pressure if investment flows continue to weaken. Spot Bitcoin ETFs registered six consecutive sessions of outflows, totalling USD 1.5 billion, with approximately USD 105 million withdrawn on Friday. Although the magnitude on Friday was smaller than in previous sessions, the persistence of negative flows could add to the downside risks.
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