Bitcoin (BTC) Price: Japanese Yields and Fed Meeting Keep Buyers on Sidelines

TLDR

• Bitcoin dropped 0.5% to $89,517 on Friday, marking a 5% weekly decline despite positive developments
• Strategy Inc bought $2.1 billion worth of Bitcoin, but the purchase failed to boost market sentiment
• U.S. spot Bitcoin ETFs saw heavy outflows, with Bitcoin trading at a discount in the American market since mid-December
• The crypto struggled to break above $90,000 as global bond market volatility and rising Japanese yields rattled risk appetite
• Traders await the Federal Reserve’s January 27-28 policy meeting for guidance on interest rates

Bitcoin closed the week lower as the cryptocurrency failed to maintain momentum above $89,000. The world’s largest digital asset fell 0.5% to $89,517 on Friday.

The weekly performance showed a 5% decline. This drop happened even as geopolitical tensions around Greenland eased and major institutional buying continued.

Strategy Inc disclosed a massive $2.1 billion Bitcoin purchase over eight days. The company has become the largest corporate holder of Bitcoin. However, markets have raised questions about the long-term sustainability of Strategy’s Bitcoin treasury approach.

The purchase did little to lift prices. Analyst Nic Puckrin noted that stopping the buying program would send as strong a signal to markets as continuing it.

U.S. spot Bitcoin ETFs recorded heavy outflows during the week. The Coinbase Bitcoin premium index showed the crypto trading at a consistent discount in America since mid-December. This metric measures the gap between U.S. Bitcoin prices and the global average.

Market Dynamics and Volatility

Bitcoin attempted to break through $90,000 on Thursday, climbing 1.1% to $89,350. The price ranged between $88,243 and $90,281 throughout the session. Buyers pushed for higher levels but couldn’t sustain gains above the key threshold.

Global bond market swings created fresh volatility. Japanese government bonds sold off during the week, lifting borrowing costs and affecting rates worldwide. The Bank of Japan held its policy meeting from January 22-23.

Safe haven assets like gold reached record highs. Physical assets attracted increased demand while Bitcoin lagged behind traditional stores of value.

Technology stocks drew the bulk of capital inflows. Artificial intelligence hype drove outperformance in tech equities. Retail investors favored these opportunities over cryptocurrencies.

The inability to hold above $90,000 triggered forced selling in derivatives markets. Leveraged positions unwound when major holders reduced risk exposure. This pattern made rallies fragile and short-lived.

Rate Expectations and Market Outlook

President Donald Trump’s warning of potential military action in Iran added to risk-off sentiment. Changing discussions on Greenland and U.S. tariffs created additional uncertainty for risk assets.

A delayed crypto regulatory bill weighed on prices. Coinbase Global Inc opposed the current version of the legislation. The exchange’s stance added regulatory uncertainty to the market.

Anthony Scaramucci spoke at Davos this week. The SkyBridge Capital founder said he hopes Bitcoin reaches between $125,000 and $150,000. He cautioned that the cryptocurrency “does whatever it wants.”

Iliya Kalchev, analyst at Nexo Dispatch, noted that Bitcoin’s price movement mirrored broader risk appetite trends. He pointed to persistent resistance around the $90,000 level.

The latest personal consumption expenditures price index figures strengthened expectations. Markets now anticipate the Federal Reserve will hold interest rates steady at its January 27-28 meeting.

Bitcoin traded near $2,941 on Thursday. Continued ETF withdrawals and rising bond yields pose downside risks that could push prices back to weekly lows.

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