The recent price movement in Bitcoin has been largely driven by macroeconomic factors and shifting market dynamics. The reassessment of Federal Reserve rate cut expectations by major investment banks, such as Goldman Sachs and Bank of America, has played a significant role. Following a robust U.S. jobs report, these banks have adjusted their forecasts, with Goldman now predicting fewer rate cuts in 2025. This shift in monetary policy expectations has contributed to Bitcoin's decline, as the market braces for a potential pause or even a rate hike, impacting liquidity and investor sentiment. Additionally, the crypto market is witnessing a substantial drop in capital inflows, with a 56% decline over the past month, indicating a cooling off period. This reduction in investment activity, coupled with a two-month low in Bitcoin's network activity, suggests waning investor interest, further pressuring Bitcoin's price.
The Proshares Ultra Bitcoin ETF (BITU) has mirrored Bitcoin's downward trend, experiencing a decline of 4.12% to $48.15 as of 5:20 AM on Monday, January 13.