Bitcoin traded near $69,700 over the weekend, posting a modest 1.3% gain as investors digested recent U.S. inflation data and its implications for Federal Reserve policy. The cryptocurrency's movement reflects renewed sensitivity to macroeconomic indicators, with traders closely monitoring interest rate expectations.
Friday's Consumer Price Index report showed core inflation cooling to 2.5% annually, its lowest level in nearly five years. While price pressures remain elevated, the downward trend provided sufficient optimism for markets to maintain expectations for potential rate cuts later this year. Following the data release, Bitcoin surged approximately 4.9%, with Treasury yields retreating in response.
Spot Bitcoin exchange-traded funds experienced significant outflows ahead of the weekend, with $410.4 million exiting the products on Thursday. Major funds from BlackRock and Fidelity accounted for the bulk of the withdrawals. Meanwhile, cryptocurrency exchange Coinbase reported an unexpected quarterly loss, its first since late 2023, citing weaker trading volumes amid market cyclicality.
Market participants now await several key developments in the coming week. The Federal Reserve will release minutes from its late January meeting on Wednesday, offering insights into policymakers' views on inflation and the timing of potential rate adjustments. On Friday, the Bureau of Economic Analysis will publish the Personal Consumption Expenditures price index, the Fed's preferred inflation gauge.
With U.S. markets closed Monday for the Washington's Birthday holiday, trading activity is expected to resume in earnest on Tuesday. Bitcoin's immediate challenge remains reclaiming and sustaining the psychologically important $70,000 threshold, a move that would likely require renewed ETF inflows and supportive macroeconomic conditions.
