The recent reassessment of Federal Reserve rate cut expectations by major investment banks, including Goldman Sachs and Bank of America, has significantly impacted Bitcoin's price movement. 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, which could affect 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 Bitcoin Strategy ETF (BITO) experienced a decline, dropping 2.3% to $22.52 at 5:20 AM on Monday, January 13.