Bitcoin Price Analysis: BTC Stable As Fed Flags Stagflation Warning

Bitcoin (BTC) remained relatively stable over the weekend, oscillating between $81,000 and $85,000. Despite the turmoil in the traditional markets, the flagship cryptocurrency has held firm above $80,000, with the stability highlighting its potential as a safe haven asset. 

BTC is currently down almost 1%, trading at $82,836 and holding above $80,000 despite ETF outflows, growing trade tensions, and concerns about delayed rate cuts by the Federal Reserve. 

Bitcoin (BTC) Holds Firm Despite Heightened Volatility 

Bitcoin (BTC) remained above $80,000 on Friday and Saturday despite broader market turmoil and selling pressure. However, demand has waned as fears of a full-blown trade war escalate, along with risks of a recession and a delayed rate cut decision by the Federal Reserve. Markets also witnessed BTC decoupling from the US equity markets and outperforming gold, signaling a significant shift in market dynamics. Market intelligence platform Santiment stated, 

“Social media has been buzzing with mentions of crypto’s ‘decoupling’ from stock markets, according to data from X, Reddit, Telegram, 4Chan, Farcaster, and BitcoinTalk. Following the S&P 500‘s -10.5% combined losses on Thursday and Friday alone, traders are optimistic that Bitcoin and other cryptocurrencies are fairly insulated from the US & China tariffs that have rocked global economies.”

It also said that crypto becoming less reliant on the stock market is a promising sign. 

“If the crypto markets are indeed becoming less and less reliant on stock markets, this would be an encouraging sign. Historically, most of the cryptocurrency’s biggest bull cycles have come when there is zero (neither a negative nor positive) correlation between the two sectors.”

Spot Bitcoin ETFs Register Outflows 

Despite Bitcoin’s relative stability, spot Bitcoin ETFs registered considerable outflows, signaling investor caution and indicating that the rally may lack strong investor backing. Federal Reserve Chair Jerome Powell also threw another curveball for the markets, suggesting a potential delay to Fed rate cuts. According to data from Farside Investors, the WisdomTree Bitcoin Fund (BTCW) registered net outflows of $44.6 million, while the iShares Bitcoin Trust (IBIT) registered net outflows of $35.5 million. Bitwise Bitcoin ETF (BITB) registered net outflows of $24.1 million, and ARK21Shares Bitcoin ETF (ARKB) saw net outflows of $22.2 million. 

However, Grayscale Bitcoin Mini Trust, Fidelity Wise Origin Bitcoin Fund (FBTC), and Franklin Bitcoin ETF (EZBC) registered net inflows. As a result, the US spot Bitcoin ETF market registered net total outflows of $165 million, ending a two-week inflow streak. 

Fed Issues Stagflation Warning 

Bitcoin and altcoins could come under renewed pressure after Federal Reserve Chair Jerome Powell warned President Donald Trump’s tariffs could lead to higher inflation and slow growth. Powell said on Friday, 

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem.”

High inflation and high unemployment can lead to stagflation, which could become difficult to manage. This is because measures taken to fix one issue, like cutting interest rates to boost growth, could worsen the other issue and vice versa. Powell also said he was in no hurry to cut interest rates as inflation remained high, a stance supported by other officials like Raphael Bostic and Adriana Kugler. However, President Donald Trump urged Powell to cut interest rates. According to market experts, a more hawkish Fed could negatively impact Bitcoin, altcoin, and stock prices. 

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) is holding above $80,000 as the weekend draws to a close. BTC’s relative stability comes despite the market turmoil and highlights its potential as a safe haven asset. The tech-heavy Nasdaq, known to be positively correlated to Bitcoin, dropped over 11% since President Trump’s announcement of sweeping reciprocal tariffs on 180 nations, escalating global trade tensions and drawing retaliatory levies from China. David Hernandez, crypto investment specialist at 21Shares, stated, 

“The S&P 500 is down roughly 5% this week as investors brace for trade-driven earnings headwinds. Meanwhile, Bitcoin has shown impressive resilience. After briefly dipping below $82,000, it rebounded quickly, reinforcing its status as a macro hedge in times of macroeconomic stress. Its relative strength could continue to attract institutional inflows if broad market volatility persists.”

However, analysts have not ruled out sharp downside volatility in the short term, especially as the “Treasury market basis trade” faces risks due to heightened turbulence in bond prices. 

BTC traded in bearish territory over the previous weekend, dropping over 3% on Friday, slipping below the 200-day SMA and $85,000 and settling at $84,422. Price action remained bearish over the weekend as BTC fell below the 20-day SMA on Saturday and settled at $82,704. The price registered a marginal decline on Sunday, settling at $82,404. BTC faced volatility on Monday as buyers and sellers struggled to establish control. Buyers ultimately gained the upper hand as the price registered a marginal increase. Bullish sentiment intensified on Tuesday as BTC rose over 3%, surging past the 20-day SMA and $85,000 to settle at $85,152. The flagship cryptocurrency surged to an intraday high of $88,624 on Wednesday as bullish sentiment intensified. However, BTC lost momentum after reaching this level and dropped over 3%, slipping below $85,000 and the 20-day SMA and settling at $82,525.

Source: TradingView

BTC recovered on Thursday despite significant selling pressure, rising almost 1% and settling at $83,199. The price continued its upward trajectory on Friday, registering an increase of 0.76% and settling at $83,828. However, it lost momentum over the weekend and registered a marginal decline on Saturday, dropping to $83,423. The current session sees BTC down almost 1% as sellers look to drive it below $80,000. However, BTC has not ceded ground to the bears and has held firm above this level. If buyers regain control, BTC could move past $85,000 and push toward $90,000.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.