- Bitcoin’s price remains stuck in consolidation.
- A hawkish Fed and the threat of tariffs have put pressure on the cryptocurrency.
- Bitcoin ETF inflows have also slowed down.
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Bitcoin had a strong run in 2024, especially in the last few months as it continued its rebound from late 2022. Several key factors drove demand, including the halving, the launch of Bitcoin ETFs, and the victory of Donald Trump, who openly supports digital currencies. Riding this momentum, Bitcoin set new highs just below $110,000 per coin.
However, the past three months have seen prolonged consolidation. With the Federal Reserve maintaining a hawkish stance, a further decline is possible. In the medium to long term, this could present an opportunity to re-enter at a better price.
Tariffs and Fed Policy Put Pressure on Bitcoin
Recent reports of new U.S. tariffs have weighed on Bitcoin price, making it harder for buyers to push higher. At the same time, the Federal Reserve remains a key influence. Following Donald Trump’s election, the Fed shifted its stance, with markets now expecting the next rate cut in September.
On a positive note, Texas is pushing new legislation to allow part of its strategic reserve to be held in Bitcoin. The proposal would also lift the current $500 million annual cap on institutional purchases and potentially create significant demand. If passed, this move could set a precedent for other states and even federal policymakers.
Looking at capital flows, the recent slowdown in Bitcoin’s rally is evident. Last week, Bitcoin ETFs saw $415 million in outflows to break a multi-week streak of inflows. Over the past five months, these funds have accumulated about $29.4 billion to push Bitcoin’s price despite ongoing consolidation. A return to strong inflows may be needed for Bitcoin to break above $110,000.
Technical View: Bitcoin Approaches Key Support in Consolidation Range
Since November, Bitcoin has been trading sideways, with key support between $90,000 and $92,000. Recent price action suggests another test of this level, but a strong selling push would be needed for a decisive breakdown.
Figure 1: Bitcoin Technical Analysis
If sellers break below this zone, the next technical target would be around $74,000. However, this remains a bearish scenario that would likely require further escalation of negative market factors.