Bitcoin price rose, breaking the $100,000 level due to rising US CPI readings. However, institutions are redeeming their spot shares in Bitcoin ETFs.
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It’s been choppy this week. The good news is that prices are holding at the upper end of the price range for the month, which is a bullish indicator.
After a worrying drop below $90,000 earlier this week, prices rebounded strongly on Wednesday, January 15, topping $100,000 for the second time this month.
This paper was last printed early last week when prices rose to $102,000 before falling sharply to $91,000. Although prices are currently higher, it is uncertain whether Bitcoin has fully recovered.
Interestingly, institutional investors appear skeptical of the upside despite Bitcoin’s recent gains. Their warning is understandable.
Inflation data raises the price of Bitcoin
Bitcoin and financial markets unexpectedly rise in response to mixed economic data from the United States.
The Labor Department announced yesterday that the Consumer Price Index rose rapidly over nine months, driven primarily by rising energy costs.
However, while inflation is rising, underlying inflationary pressures appear to be easing. More importantly, core inflation is slowing, which is a positive sign.
This report comes on the heels of the Labor Department’s announcement that the Producer Price Index rose more slowly than economists expected.
Therefore, combining the slowdown in core inflation and slower-than-expected PPI growth, analysts concluded that the economy may slow and inflation may decline.
This suggests that the Fed, which adopted a hawkish stance at the FOMC meeting in December, may not implement tight monetary policies aggressively in the first quarter of 2025.
Bitcoin has become increasingly sensitive to monetary policy decisions, and its price may rise or fall depending on the path the Federal Reserve chooses.
The reference to a “warming” economy resonates favorably with traders, increasing demand and ultimately pushing Bitcoin above $100,000.
Technically, the uptrend is still intact, and as long as BTC trades above $90,000, prices are likely to remain within the bull flag. Any break above $108,000 could push the world’s most valuable cryptocurrency towards $120,000 with bulls doubling down.
(Bitcoin/Dollar)
Wall Street is skeptical about $100,000
Although traders are optimistic and momentum is building after prices crossed the $100,000 mark, institutional demand for spot Bitcoin ETFs is drying up.
According to Lookochain data, institutions appear to be redeeming their shares.
(source)
On January 15, more than 3,000 bitcoins worth $302 million were recovered. Notably, BlackRock’s iShares also saw outflows of 2,274 Bitcoin, or $224 million.
Furthermore, on January 14, institutions continued to sell, withdrawing 2,244 BTC worth $216.1 million.
(source)
The fact that the “big boys” have redeemed their shares indicates broader hesitation among institutional investors. As Bitcoin rises and Bitcoin ETFs experience outflows, this could indicate that they are taking profits or shifting money into other assets, such as bonds.
This approach makes sense. After the rally in November, the cryptocurrency market appeared to be overextended.
Combined with ongoing market concerns, Wall Street may be cautious about overcommitting amid ongoing economic uncertainty.
However, this forecast could change if Bitcoin continues to rise and breaks the $108,000 level.
Find out: The dust settles on XRP price collapse: is it the best presale to buy in 2024?
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The post Bitcoin Recovers $100,000 Based on Inflation Data, But Bigs Are Not Convinced appeared first on 99Bitcoins.