Bitcoin Steadies Near $86,000 on Fed Rate Cut Hopes
Bitcoin (BTC) opened the week trading around $86,000 after falling last week. Investors are hopeful the Federal Reserve (Fed) will cut rates in December. This hope is pushing traders toward riskier assets like Bitcoin. However, US institutional investors remain cautious, as Bitcoin Exchange Traded Funds (ETFs) continue to see outflows.
Fed Rate Cut Expectations Lift Bitcoin
Bitcoin bounced back from a Friday low of $80,600 to stay above $86,000 on Monday. New York Fed President John Williams called current monetary policy “modestly restrictive.” He hinted that rate cuts could happen soon. Following this, the market now sees about a 75% chance that the Fed will lower interest rates in December, according to CME FedWatch data.
This optimism encourages investors to buy riskier assets like Bitcoin. A QCP analyst said Thanksgiving week will test the strength of Friday’s recovery. They also noted that weekend price rebounds are often unreliable. Market watchers will closely monitor ETF inflows and US market activity for signs of a turnaround.
Institutional Investors Continue Pulling Out
Institutional demand for Bitcoin remains weak. Data from SoSoValue shows Bitcoin spot ETFs had $1.22 billion in outflows last week. This marks the fourth straight week of withdrawals since late October. If this trend continues, it could lead to further price drops and indicate weakening confidence from institutions.
Bitcoin Price Outlook
Bitcoin’s price has dropped over 20% since hitting $106,453 on November 11. On Friday, it fell to $80,600 but gained back some ground over the weekend.
- BTC closed above $86,800 on Sunday.
- It trades near $86,000 as of Monday.
- If the uptrend continues, the next key resistance level is $90,000.
The Relative Strength Index (RSI) on the daily chart is 27, signaling oversold conditions. This suggests the downward momentum might ease soon. However, if Bitcoin loses this support, it may fall back toward the $80,000 level.
