Bitcoin has once again demonstrated resilience, holding firm above the $85,000 mark despite broader economic uncertainties. Investors have been quick to interpret Federal Reserve Chair Jerome Powell’s comments as a sign that rate cuts could be on the horizon. However, some analysts, including deVere Group CEO Nigel Green, caution that the market may be underestimating inflationary risks posed by Donald Trump’s proposed tariffs.
Optimism Amid Economic Uncertainty
The Federal Reserve’s decision to maintain interest rates was not surprising, but Powell’s indication of potential cuts later this year has fueled enthusiasm in both traditional and crypto markets. Bitcoin initially surged past $86,000 before stabilizing, reinforcing its position as a hedge against inflation. However, Green warns that protectionist policies could push production costs higher, keeping inflation elevated and possibly delaying rate cuts.
Market Sentiment and ETF Inflows
Bitcoin traders remain divided. On-chain prediction markets indicate that over 74% of users expect BTC to remain above $83,000 through the week. While Bitcoin ETF inflows have slowed, with $11.8 million recorded in recent days, analysts argue this is not necessarily a bearish sign. Sustained trading volumes suggest continued engagement rather than fading interest.
Ethereum, on the other hand, has faced minor outflows, reflecting investor uncertainty about its near-term potential. Solana, in contrast, has seen a boost with the launch of new ETFs tracking its futures contracts. The Volatility Shares Solana ETF (SOLZ) and a leveraged counterpart (SOLT) are set to begin trading, which could drive further institutional interest in the asset.
Should You Buy, Hold, or Sell?
For now, Bitcoin appears to be in a consolidation phase, balancing between bullish sentiment and macroeconomic risks. If inflation proves more persistent than expected, the market’s optimism regarding future rate cuts may wane, leading to increased volatility. Investors should closely monitor ETF flows, macroeconomic developments, and technical support levels to assess their positions accordingly.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.
