The bullish ETF flows and Bitcoin’s relief rally are largely unaffected by escalating tensions in the Middle East and rising oil prices.
The divergence reflects a “classic seller exhaustion” phase followed by institutional re-engagement, Rachel Lin, CEO of decentralized crypto exchange SynFutures, told Decrypt. “Once forced selling subsides, even modest inflows can have an outsized impact on price and flows.”
The ETF inflows are a double-edged sword, according to Lin. While they make Bitcoin’s recovery to $75,000 more durable, they also make it sensitive to macroeconomic catalysts, she said. “Without a clear shift in liquidity conditions or policy expectations, we expect inflows to be episodic rather than a sustained one-way trend.”
The true test of the crypto market’s bullish outlook will occur later today during the policy meeting.
“Crypto markets will likely trade cautiously with relatively tight ranges,” Gracy Chen, CEO of crypto exchange Bitget, told Decrypt. “Any dovish tone from the Federal Reserve could support risk assets, including Bitcoin, while a hawkish stance may trigger short-term volatility.”
