Bitcoin at the $90,000 Mark: Institutional Investors Spring into Action Before the Fed

The price of Bitcoin continues to stay below $90,000 as investors maintain a cautious stance. Ahead of the Federal Reserve's interest rate decision, market players are seriously focused on the Federal Open Market Committee meeting. Bitcoin, which fell to the mid-$80,000s over the past week, is currently trading at approximately $87,900.

Analysts attribute the current situation to a decrease in leveraged trading, outflows from exchange-traded funds, and macroeconomic uncertainties. This slowdown following the upward momentum in January has led investors to reduce their risk appetite and adopt more cautious positions. According to data provided by Glassnode, while spot trading volumes have stabilized, an indecisive trend prevails in the markets.

Particularly noteworthy is the activity of institutional investors. It has been recorded that U.S.-based spot Bitcoin exchange-traded funds have experienced a net outflow of over $1.3 billion for five consecutive days. This situation clearly indicates that institutional investors are looking to reduce their risks ahead of the Fed meeting.

Market experts view the stagnation in Bitcoin prices not only as a decline in demand but also as a repricing of interest rate expectations. The likelihood of the Fed keeping interest rates high for an extended period makes it difficult for risky assets to compete with traditional investment vehicles like Treasury bonds. According to CME FedWatch data, market participants are 97% certain that interest rates will remain unchanged at this meeting.

Geopolitical tensions and political uncertainties in the U.S. are directing investors towards safe havens like gold and silver, increasing pressure on the cryptocurrency market. Data from the options market indicates that investors are trying to protect themselves against short-term fluctuations. Bitfinex analysts note that changes in open position data suggest that while the medium-term structure of the market is not stagnant, the market is currently going through a sensitive period with respect to news flow in the short term.

As a result, a reduction in selling pressure and a revival of institutional demand are expected for Bitcoin prices to rise again. Investors should carefully monitor especially the $90,000 threshold and institutional activity.