"Bitcoin has slipped below the USD 90,000 mark as it faces simultaneous pressure from a prolonged high-interest-rate environment, lingering macroeconomic uncertainty, and a clearly cautious stance from institutional capital. In the short term, Bitcoin's outlook is being driven more by macro conditions and actual capital flows than by the long-term narratives the market is accustomed to. After the sharp volatility seen toward the end of 2025, BTC is no longer trading in a state of euphoria, but instead reflects the cautious sentiment of global investors amid persistently high rates and financial conditions that have yet to meaningfully ease."
"One of the most important factors influencing Bitcoin at present is the level of U.S. Treasury yields. With the 10-year yield holding around the 4.2-4.3% range, global funding costs remain elevated, encouraging capital to favour assets with clear yields over non-yielding assets such as Bitcoin. In such an environment, BTC struggles to attract sustained new inflows unless markets begin to believe that the monetary policy cycle is approaching a turning point."
"In terms of monetary policy, the Federal Reserve is widely expected to maintain a cautious stance at its late-January meeting. As the "rates on hold" scenario has largely been priced in, Bitcoin's short-term direction is now less about the rate decision itself and more about the Fed's tone and forward guidance. Against this backdrop, only sufficiently strong economic data capable of shifting expectations around the rate path are likely to generate meaningful volatility in BTC; otherwise, the market is likely to remain locked in a tug-of-war."
Bitcoin has fallen below USD 90,000 amid prolonged high interest rates, macro uncertainty, and cautious institutional capital. Short-term price action is driven by macro conditions and actual capital flows rather than long-term narratives. Post-2025 volatility has shifted BTC from euphoria to cautious investor sentiment amid persistently high rates and tight financial conditions. Elevated U.S. 10-year Treasury yields around 4.2-4.3% keep global funding costs high and favor yield-bearing assets over Bitcoin. The Federal Reserve is expected to maintain a cautious stance, so Fed tone and forward guidance will matter more than the rate decision itself. Institutional flows, particularly via U.S. spot ETFs, remain decisive.
Read at London Business News | Londonlovesbusiness.com
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