Bitcoin remained below the important $60,000 level on Monday as persistent exchange-traded fund outflows and concerns about US interest rates continued to pressure the cryptocurrency market.
The world’s largest cryptocurrency was trading 0.4% lower at approximately $59,765 as of 01:02 ET, or 05:02 GMT.
Bitcoin Heads for Second Straight Quarterly Loss
Bitcoin is on course to record a quarterly decline of around 13%.
This would mark its second consecutive quarterly loss and only the third time in Bitcoin’s history that the cryptocurrency has posted back-to-back quarterly declines.
Bitcoin has also fallen by more than 30% since the beginning of the year, reflecting weaker investor confidence and reduced demand for riskier assets.
Bitcoin ETF Outflows Pressure the Market
Continued withdrawals from US spot Bitcoin ETFs have weighed heavily on market sentiment.
US-listed Bitcoin funds recorded their seventh consecutive week of net outflows. Around $1.8 billion reportedly left the products during the previous week, according to data from SoSoValue.
Monthly withdrawals have now exceeded $4 billion.
The sustained Bitcoin ETF outflows suggest that institutional investors have become more cautious amid wider financial market volatility.
Spot Bitcoin ETFs had previously been viewed as an important source of demand for the cryptocurrency. However, recent withdrawals have removed a key source of support from the market.
Hawkish Federal Reserve Outlook Weighs on Bitcoin
Bitcoin has also faced pressure from a stronger US dollar and growing expectations that the Federal Reserve will maintain tighter monetary policy for longer.
Recent US economic data has shown that inflation remains persistent while the labour market continues to demonstrate resilience.
As a result, investors are increasingly considering the possibility that the Federal Reserve could raise interest rates during the year rather than begin a new cycle of monetary easing.
Higher interest rates tend to reduce demand for speculative investments such as cryptocurrencies. They can also strengthen the US dollar, making Bitcoin and other digital assets less attractive to some investors.
US Employment Report Comes Into Focus
Traders are now preparing for this week’s US employment report.
The data could provide further clues about the strength of the American economy and the Federal Reserve’s future interest-rate decisions.
A stronger-than-expected labour market report could reinforce expectations that borrowing costs will remain high.
In contrast, signs of weaker employment growth could reduce pressure on the Federal Reserve to tighten monetary policy further.
US-Iran Developments Add to Market Uncertainty
Investors were also monitoring developments in the Middle East following reports that the United States and Iran had agreed to halt recent hostilities.
The two countries are expected to resume negotiations after renewed clashes around the Strait of Hormuz over the weekend.
The prospect of further diplomatic talks helped stabilise sentiment across global financial markets.
However, traders remained cautious because renewed tensions could disrupt energy supplies and increase volatility in oil and other global markets.
The Strait of Hormuz is a critical route for international energy shipments. Any disruption to maritime traffic could push oil prices higher and create additional inflationary pressure.
Cryptocurrency Market Trades Mostly Lower
Most major altcoins also moved lower on Monday, extending losses recorded during the weekend.
Ethereum, the world’s second-largest cryptocurrency, slipped by around 0.2% to approximately $1,564.92.
XRP declined by about 1% to trade near $1.037, while Cardano also fell by approximately 1%.
Solana was one of the few major cryptocurrencies to move higher. The token gained around 1.2%, outperforming the wider digital asset market.
Among meme cryptocurrencies, Dogecoin dropped by approximately 2.2%.
Bitcoin Investors Remain Cautious
Bitcoin’s failure to recover above $60,000 highlights the cautious mood currently affecting the cryptocurrency market.
Persistent Bitcoin ETF outflows, uncertainty over Federal Reserve policy and geopolitical risks have all reduced demand for digital assets.
Investors will now be watching US economic data, institutional fund flows and developments in the Middle East for signs that market conditions are beginning to improve.
Tags: Bitcoin, Bitcoin Price, Bitcoin ETFs, Cryptocurrency Market, Federal Reserve, Ethereum, Crypto News
