Bitcoin staged a modest recovery during Friday's trading session, advancing approximately 1.9% to change hands near $67,590. The digital asset experienced notable volatility, dipping to an intraday low of $66,255 before climbing toward the $68,241 level. This price action reflects the cryptocurrency's continued sensitivity to shifting expectations surrounding U.S. monetary policy, often rallying on hopes for easier financial conditions and retreating when those expectations are scaled back.
Spot ETF Outflows Extend to Five Weeks
Demand for Bitcoin through regulated exchange-traded funds showed further signs of strain. Data indicates spot Bitcoin ETFs, which hold the underlying cryptocurrency, posted net outflows totaling $165.76 million on February 19. This marks the fifth consecutive week of withdrawals, bringing the total capital pulled from these products over that period to nearly $4 billion. Market analysts offer differing perspectives on the trend. Some suggest it is natural for leveraged funds and short-term allocators to reduce exposure in the current environment. Others contend these redemptions have largely mirrored Bitcoin's recent price movements rather than acting as a primary catalyst for the decline.
Federal Reserve Policy Divisions Add to Caution
Investor caution is being compounded by mixed signals from the Federal Reserve. Minutes from the central bank's late January meeting, released this week, revealed a division among policymakers after they opted to hold the benchmark interest rate steady in a range of 3.50% to 3.75%. The record indicated that several officials left the door open to additional rate hikes should inflation fail to cool sufficiently toward their target. This lack of a unified forward path has created uncertainty, with strategists noting that policymakers appear to be pulling in opposite directions, complicating the market's outlook.
The inflation debate remains unresolved by recent data. The Personal Consumption Expenditures (PCE) price index for December, the Fed's preferred inflation gauge, showed a year-over-year increase of 2.9%. The core reading, which excludes volatile food and energy prices, came in at 3.0%. Economists warn that figures at this level are likely to trigger renewed concern within the Federal Reserve that inflationary pressures require closer scrutiny, potentially delaying any pivot toward rate cuts.
Mixed Moves in Crypto-Related Equities
The trading session saw divergent performance among stocks tied to the digital asset ecosystem. Shares of cryptocurrency exchange Coinbase Global advanced roughly 2%, while bitcoin mining specialist Marathon Digital retreated approximately 1%. The broader equity market moved higher, supported by a boost in risk appetite following a U.S. Supreme Court decision related to tariffs and as traders continued to digest a mix of U.S. growth and inflation figures.
Regulatory Developments and Market Outlook
In Washington, a White House gathering focused on the Digital Asset Market Clarity Act concluded without a definitive breakthrough on the treatment of stablecoin yields. However, participants described the dialogue as constructive and cooperative. Market participants are closely monitoring developments on this legislative front for clearer regulatory guidance.
Despite the day's rebound, analysts see no clear catalyst for a sustained upward move in Bitcoin, noting that sellers have been quick to emerge during any price recovery. Some market observers warn that if negative sentiment persists, Bitcoin could test support below the $65,000 level. Investors are now looking ahead to the next U.S. personal income and outlays report, which includes the crucial PCE inflation data, scheduled for release on March 13. They are also watching ETF flow data for signs of stabilization and tracking progress on crypto legislation in Washington.
