The price of Bitcoin fell below $90,000 on Thursday, ending the momentum seen at the beginning of the year. This correction comes despite a macroeconomic environment that remains favorable to risky assets, highlighting the current fragility of the market.
A Pullback after the New Year’s Rebound
Over the last 24 hours, Bitcoin has dropped by around 2%, slipping below $90,000. However, it still maintains a positive performance of nearly 3% over the week, indicating a period of consolidation rather than a sudden trend reversal.
Ethereum followed a similar trajectory, with a daily decrease of about 3%, yet still up by approximately 4% over seven days. Among the top cryptocurrencies, XRP saw short-term declines, down by roughly 6% for the day, although it remains up by 14% for the week. Dogecoin, on the other hand, leads the weekly performance with a surge of over 18%.
Bitcoin ETFs in the Spotlight
The most negative signal comes from the outflows. U.S.-listed Bitcoin spot ETFs have recorded over $480 million in net outflows, marking two consecutive days of withdrawals for the first time this year. This trend directly impacts prices since ETFs have become a crucial channel for institutional demand.
These outflows suggest that some investors are taking advantage of the January rebound to lighten their positions rather than increase exposure. In a market still heavily reliant on flows, this shift quickly reflects in prices.
A Still Favorable Macro Context
Paradoxically, the macroeconomic backdrop remains positive. Global bond markets are rallying, with yields generally decreasing. The U.S. 10-year rate has fallen to around 4.14%, driven by weaker-than-expected economic data.
In the U.S., private employment growth in December disappointed, with only 41,000 jobs created according to ADP, compared to the consensus expectation of 50,000. This figure has raised expectations of Federal Reserve interest rate cuts later in the year. Some segments of the rate market now anticipate at least two 0.25% cuts by the end of the year.
This potential monetary easing has also spread to Asia, where Australian, New Zealand, and Japanese bonds have seen sustained demand.
A Still Hypersensitive Crypto Market
In theory, expectations of more accommodative monetary policy support risky assets, including crypto. Yet, Thursday’s movement highlights a persistent reality: the market remains highly sensitive to flows and sentiment surrounding Bitcoin.
Following a largely stagnant December marked by reduced volumes and limited risk-taking, the January rebound is not seen as a smooth ride. Improved liquidity prospects and a more stable political climate provide tailwinds, but they are insufficient to counteract ETF outflows or a renewed interest in traditional assets.
Short-term, the message is clear. The crypto market is surviving, but barely. As long as flows remain uncertain, each rebound will be vulnerable to rapid corrections, even in an apparently positive macro environment.
