5 min readBitcoin has pulled back from its recent rally, slipping to 88,000 as profit-taking takes place as the market digests, a more hawkish tone from Federal Reserve chair Jerome Powell.
Bitcoin peaked at even $93,000 on November 13 and trades down around 8% from that record high. Even so, Bitcoin is still on track to book gains of 16% this week after 10% gains last week.
Fed Powell dampens rate cut bets.
Bitcoin has eased off its record high as investors digest the Federal Reserve chair’s latest comments. Powell warned that the Fed was in no rush to cut interest rates given ongoing economic growth, a solid jobs market, and inflation that remains above the 2% target.
Following his comments and hotter-than-expected inflation data this week, the market has lowered rate cut expectations. Now, the market sees just a 48% probability of a rate cut in December, down from 80%, and is pricing in just 71 basis points worth of cuts by the end of 2025.
A lower interest rate environment is more beneficial for risk assets such as Bitcoin, so this latest repricing, combined with some profit-taking, has seen the BTC price ease back below 90k.
BTC ETFs book outflows as BTC falls
Spot Bitcoin exchange-traded funds in the US also saw 400 million in outflows on Thursday after a six-day streak of inflows for ETFs. Fidelity FBTC led the outflows with $179.2 million, leaving the fund with its largest daily net outflow since May 1st. Meanwhile, Black Rocks IBIT, the largest spot Bitcoin ETF, was one of the only two ETFs to experience positive flows on Thursday, recording $126.5 million in net inflows.
Despite recent developments, Bitcoin is still on track to book its strongest weekly performance since February, boosted by optimism for deregulation under the incoming Trump administration.
Meme coins pull back after recent gains.
The pullback today is also being seen across meme coins. Those coins whose prices have skyrocketed over the past week, such as DOGE and PNUT, are now among the biggest daily decliners, booking double-digit losses.
Meme coins have emerged as a major trend in the cryptocurrency sector, frequently making headlines due to the rapid price increases driven by social media and the internet culture. However, they can just as quickly experience a significant correction, leading to large losses.
PEPE eases but rises 100% this week
PEPE has been another stronger performer this week, gaining 100% over the past 7 days and trading 4% lower today. The coin was listed on the Coinbase exchange yesterday. Social media mentions for PEPE surged 344% this week compared to a 72% increase in Bitcoin’s social media mentions.
Author
Risk Disclaimer
