Bitcoin (BTC) Holds Steady as ETF Inflows Counter Fed Jitters and Tariff Fears

Bitcoin Moves Sideways on Fed Jitters and Trump Tariffs

On Saturday, February 8, bitcoin (BTC) edged 0.02% higher, following Friday’s 0.01% dip, closing at $96,654. Significantly, BTC moved within a tight range as investors considered the potential impact of recent US economic data and Trump’s tariffs on the Fed’s rate path.

US Labor Market and Consumer Sentiment Report Sinks Fed Rate Cut Bets

This week, lower US unemployment, steady wage growth, and rising consumer inflation expectations dampened hopes for an H1 2025 Fed rate cut.

According to the CME FedWatch Tool, the chances of the Fed maintaining interest rates in May rose from 60.7% to 73.8% in the week ending February 7. A higher-for-longer Fed rate path could raise borrowing costs, impacting demand for risk assets. The shift in sentiment toward the Fed rate path pulled BTC down from a February 3 high of $102,295 to a February 7 low of $95,695.

BTC’s recent price trend contrasts with gold, which climbed to four consecutive all-time highs in the week.

US-China Trade Tensions Add to Market Volatility

Further uncertainty stemmed from escalating US-China trade tensions. The US administration rolled out 10% tariffs on Chinese goods on February 4, with China announcing retaliatory tariffs. The escalation in trade tensions sent BTC to a February 4 weekly low of $91,274.

However, BTC rebounded as investors viewed China’s response as measured. Nevertheless, uncertainty about whether the US and China can avoid a trade war remained a BTC headwind.

A full-blown trade war could impact the global economy and influence the Fed’s monetary policy stance. US tariffs may push import prices higher, fueling inflationary pressures. Rising inflation could prompt a more hawkish Fed, weighing on risk sentiment.

ETF Market Flows Provide BTC Support

Despite the macroeconomic and geopolitical headwinds, the US BTC-spot ETF market extended its inflow streak to six weeks. According to Farside Investors, key BTC-spot ETF movements included:

• iShares Bitcoin Trust (IBIT) had net inflows of $315.3 million.
• ARK 21Shares Bitcoin ETF (ARKB) saw net inflows of $64.4 million.
• However, Fidelity Wise Origin Bitcoin Fund (FBTC) reported net outflows of $217.7 million.

The US BTC-spot ETF market registered $203.8 million of total net inflows in the week, down from $559.5 million the previous week. Weekly total net inflows were the lowest in the current inflow streak.

Progress toward a US Strategic Bitcoin Reserve (SBR) bolstered institutional investor demand for US-BTC-spot ETFs, cushioning BTC’s downside. This week, the US state of Utah’s House passed an SBR bill. If the Senate passes the bill, other states may follow, potentially paving the way to a US SBR.

A US adoption of the Bitcoin Act could trigger a surge in BTC demand. John Deaton recently stated that BTC could hit $1 million if the US government enacts Senator Lummis’ Bitcoin Act. Senator Lummis introduced the Bitcoin Act in 2024, requiring the government purchases one million BTC over five years, with a mandatory holding period of 2 years.

BTC Price Outlook: Markets Await Catalysts

BTC’s price trends remain hinged on Trump’s foreign policies, the Fed rate path, SBR developments, and US BTC-spot ETF flows.

• Upside Potential: US BTC-spot ETF inflows and progress toward a US SBR could counter Fed policy jitters, driving BTC beyond the record high of $109,312.
• Downside Risks: A lack of progress toward an SBR, BTC-spot ETF outflows, and a hawkish Fed could pull BTC toward $90k.

Dive deeper into the influence of macroeconomic data, US crypto policies, and BTC-spot ETF market flows on price action. Follow our analysis and forecasts here to manage crypto-related risks.

Technical Analysis

Bitcoin Analysis

Following this week’s pullback, BTC sits below the 50-day Exponential Moving Average (EMA) while remaining above the 200-day EMA. The EMAs send bearish near-term but bullish longer-term price signals.

A BTC return to $100K would bring the $105k level into play. If BTC breaks above $105k, the bulls to target the all-time high of $109,312 next.

Conversely, if BTC breaks below $95K, it could signal a fall toward the $90,742 support level.

With a 43.05 14-day Relative Strength Index (RSI) reading, BTC could fall to the $90,742 support level before entering oversold territory (RSI below 30).

Stay ahead of market trends by exploring real-time BTC price data and indicators here.

Ethereum Analysis

ETH, still the second-largest cryptocurrency by market cap, remains below the 50-day and 200-day EMAs, sending bearish price signals.

An ETH break above the $2,815 resistance level could support a move toward the 200-day and 50-day EMAs. A breakout from the 50-day EMA may enable the bulls to target the $3,287 resistance level.

ETH-spot ETF flow trends remain crucial for near-term price movements.

Conversely, dropping below $2,500 could bring the $2,308 support level into sight.

The 14-period Daily RSI reading of 31.75 suggests ETH could fall below $2,500 before entering oversold territory. (RSI below 30).

Final Thoughts

Bitcoin’s path to $110,000 remains uncertain as traders monitor Trump’s tariffs, ETF flows, and potential shifts in the Fed rate path. Investors must track macroeconomic data, crypto regulations, and BTC-spot ETF trends to navigate market volatility effectively.

Stay ahead of crypto market trends with real-time data and expert insights here.