Cryptocurrency inflows last week reached a modest $48 million, reflecting a volatile market reaction to changing macroeconomic indicators and new developments in US monetary policy.
This significant change compared to the first week of 2025 suggests that the brief post-election growth spurt in the United States may be over, as macroeconomic conditions return to being the dominant factor affecting the US economy. asset price.
Fed Hawks Affect Cryptocurrency Inflows
CoinShares’ latest report revealed that digital assets saw inflows of nearly $1 billion in the first half of the week ending January 11. However, macroeconomic data was stronger than expected and The release of the US Federal Reserve’s meeting minutes resulted in outflows reaching $940 million in the second half of the week.
“This suggests that the post-election honeymoon in the United States is over, and macroeconomic data is once again a key factor in adjusting asset prices,” the report said. said.
Indeed, minutes from last week’s Federal Open Market Committee (FOMC) meeting showed the Fed’s growing concern about inflationary pressures. Policymakers are especially concerned about President-elect Donald Trump’s proposed fiscal policy.
The minutes provide few clues about the possibility of interest rate cuts in the near future, further reinforcing the Fed’s hawkish stance. As TinTucBitcoin reported, this stance has put downward pressure on risk assets, including cryptocurrencies.
Bitcoin, the leading digital asset, is an example of this trend. Despite recording $214 million in inflows earlier in the week, Bitcoin experienced significant outflows afterward, reflecting broader market sentiment. Still, Bitcoin is still the best-performing digital asset so far this year, with cumulative inflows reaching $797 million.
The sudden change in sentiment shattered the promising start to 2025. In the first week of the year, cryptocurrency inflows reached an impressive $585 million. This upward momentum appears likely to continue, but recent macro developments have dampened the enthusiasm.
With macro trends returning as the main market driver, key US economic data released this weekend could influence sentiment towards Bitcoin and cryptocurrencies. In particular, the Consumer Price Index (CPI) and Producer Price Index (PPI) can play an important role in assessing the economic outlook and thereby influencing investor sentiment towards the economy. with cryptocurrency.
Investors will be closely watching the CPI and PPI reports, along with unemployment claims, for any signs that inflation is easing or the labor market is cooling. These data could provide clues about the Fed’s next move, and in turn provide a clearer view for the digital asset market.
Despite recent setbacks, the long-term outlook for cryptocurrencies remains optimistic ahead of Trump’s inauguration next week.
According to data from TinTucBitcoin, Bitcoin remains above the psychological level of $90,000, trading at $91,565 as of the time of this writing. However, a price drop is more likely as demand declines, with some analysts predicting a further drop for BTC to bottom around $70,000.
“Occurs according to the Wyckoff distribution model for Bitcoin. We could see prices at $80,000 and even lower at $70,000,” said one trader. wrote.