Bitcoin slides as Fed uncertainty and ETF outflows weigh on sentiment

Bitcoin fell more than 2% on Monday, erasing late-week gains as traders reassessed expectations for further Federal Reserve easing.

The cautious tone struck by Chair Jerome Powell at last week’s meeting has left markets questioning the scope of the central bank’s dovish direction.

Currently, investors assign around a 70% probability of another rate cut in December, down from 90% just a week ago.

The week’s upcoming US data releases, including ISM manufacturing and services PMI, coupled with several Fed officials’ speeches, could prove pivotal in shaping policy expectations. Weak data or dovish remarks could weigh on US treasury yields, benefiting riskier assets like Bitcoin.

On the bright side, global trade talks developments could limit downside risks. The White House confirmed that Washington and Beijing have agreed to pause new tariffs and roll back several trade measures. The move could favour risk appetite and help reduce downside risks for Bitcoin.

Still, crypto-specific pressures persist. Bitcoin ETFs posted USD 191 million in outflows on Friday, bringing the weekly total to nearly USD 800 million. Liquidation data also reflected bearish positioning, with over USD 425 million in long positions versus just USD 60 million in shorts in the past 24 hours.