Bitcoin's recent price decline is driven by macroeconomic factors and shifting market dynamics. The reassessment of Federal Reserve rate cut expectations by major investment banks, following a robust U.S. jobs report, has led to a more cautious outlook on monetary policy. Goldman Sachs and Bank of America have adjusted their forecasts, anticipating fewer rate cuts in 2025, which has contributed to Bitcoin's downward movement. This shift suggests potential changes in liquidity and investor sentiment, impacting the cryptocurrency market. Additionally, a significant drop in capital inflows, with a 56% decline over the past month, indicates a cooling period in the crypto market. Network activity for Bitcoin has also reached a two-month low, raising concerns about waning investor interest.
The ProShares Short Bitcoin Strategy ETF (BITI) has responded to these developments, rising 2% to $24.00 as of 5:20 AM on Monday, January 13.