Bitcoin (BTC), after having fallen by nearly 7%, lost the $90,000.00 level on January 13 to reach $88,900. macroeconomic uncertainty gripping the markets, according to Bitfinex’s latest Alpha report.
Reports noted the drop in price coincided with a change in sentiment on the market. Exchange-traded Bitcoin funds (ETFs), experienced net outflows in 7 of the 12 last trading days.
The momentum has reversed despite a solid start of the year marked by almost $1 billion worth of inflows between Jan. 3, and 6, and $718,000,000 in outflows from Jan. 8, and Jan. 10, This is in line with the macroeconomic conditions, which include rising Treasury yields as well as Federal Reserve policies.
The US Treasury yield on 10-year bonds reached 4.79% – its highest in 14 months. Bitcoin’s surge is a result of the increased opportunity costs associated with holding assets that do not yield and encourages investors to look for safer options, such as government securities.
Regarding the new Fed stance, hawkish minutes from the Federal Open Market Committee (FOMC) and stronger-than-expected US job growth have decreased the likelihood of rate cuts in 2025, tightening financial conditions and curbing liquidity in speculative markets like crypto.
Treasury yields’ dual pressure
The rising Treasury yields have a double impact on Bitcoin. Increased yields encourage institutional capital to invest in bonds, while tightening of financial conditions results in a reduction of overall liquidity.
Institutional investors then rebalance their portfolios in favor of bonds, preferring them to volatile and non-yielding investments like Bitcoin. Additionally, higher borrowing costs decrease inflows into speculative markets, amplifying the downward pressure on Bitcoin’s price.
Bitcoin’s volatility, and its sensitivity towards liquidity shifts has historically caused it to react more quickly than equity to similar changes. Bitcoin, for example, often responds in weeks to higher yields while equity markets may need months to do so, such as during past yield spikes.
Bitcoin’s price trajectory remains tied to US equities, particularly the S&P 500 (SPX). BTC/SPX is correlated with the S&P 500 (SPX) and usually strongest during first quarter.
Bitcoin’s relative strength has been maintained despite the SPX’s reverse of its 3.1% rise from January. The price of Bitcoin has risen by 42 percent since 2024’s election-day low, which was $67.541.
Ranging environment
Amid macro pressures, Bitcoin’s relative strength can be attributed to optimism over potential regulatory changes. President-elect Donald Trump’s new term and the prospect of more favorable crypto policies have bolstered confidence in the market, offering a counterbalance to broader risk-asset challenges.
Bitcoin is hovering at $90,000. The market will likely enter a range-based environment, characterized by consolidation periods. The evolving macroeconomic backdrop—shaped by rising Treasury yields, hawkish Fed signals, and ETF outflows—suggests a challenging road ahead for risk assets.
However, Bitcoin’s resilience compared to traditional equities signals that it may continue to attract investor interest, mainly as regulatory clarity improves. Bitcoin holders must balance macroeconomic challenges with potential changes in sentiment and policy.
Bitcoin Market Data
The time of the press On Jan. 13, 2025, 11:23 PM UTCBitcoin’s market capitalization is the highest in the world. Avail of our discounts 0.23% Over the last 24 hours. Bitcoin is valued at 1.87 trillion Dollars With a daily trading volume of $72.86 billion. Learn more about Bitcoin ›
Bitcoin
On Jan. 13, 2025, 11:23 PM UTC
$94,304.51
0.23% Crypto Market Analysis
The time of the press On Jan. 13, 2025, 11:23 PM UTCThe crypto market has a total value of at 3.27 trillion dollars With a volume of 24 hours. $77.1 billion. Bitcoin is the dominant currency at this time. 57.20%. Learn more about the crypto market ›
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