Key Takeaways:
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The selling of Bitcoin by institutional investors might be seen as Bitcoin ETFs recorded net outflows of $1.38 billion in 4 trading sessions.
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BTC futures data shows a neutral base rate of 5%, well below the ten% level that typically defines a real bullish breakout.
Bitcoin (BTC) briefly rose above $92,000 following reports of a U.S. Justice Department investigation into Federal Reserve Chairman Jerome Powell, although traders remain cautious about ETF outflows. Despite the strange result, Bitcoin traders remain skeptical attributable to exchange-traded fund outflows and weak demand for bullish leveraged BTC positions.
Bitcoin/USD vs. Gold and Silver. Source: TradingView
Despite the recent rally, Bitcoin remains to be down 23% since October 2025, while gold and silver hit all-time highs in 2026. This divergence has led traders to query whether the digital store of value narrative is losing strength. Therefore, even when Bitcoin rises one other 14% towards $105,000, investors could also be hesitant to turn into bullish, especially as analysts are less confident that the US will provide further stimulus within the near term.
Goldman Sachs not expects a rate cut in March, citing continued inflation and robust labor market data despite temporary slowdowns. US President Donald Trump has openly criticized the Fed for keeping rates of interest elevated at the same time as inflation remained above the two% goal within the second half of 2025. Powell's term as Fed chair ends in April, opening the door for a successor who could also be more inclined toward looser monetary policy.
Powell is under investigation over the Fed's constructing renovation project, leading analysts to query whether the central bank's independence could possibly be in danger – a scenario that might favor alternative scarce assets reminiscent of Bitcoin. Powell said the motion have to be seen within the broader context of the Trump administration's threats.
Despite major corporate purchases, Bitcoin doesn’t hold the $94,000 mark
Even as Bitcoin reclaimed $91,000 on Monday, traders showed little interest in an upward move, based on BTC derivatives data.
BTC 2-month futures base rate. Source: Laevitas.ch
Bitcoin's risk profile appears largely unchanged by the facility struggle between the Fed and the Trump administration, because the annual premium or base rate of BTC futures remained near a neutral to bearish 5%. Periods of bullish sentiment are typically characterised by BTC futures trading at a premium of 10% or more in comparison with spot markets.
More importantly, Bitcoin spot ETFs recorded net outflows of $1.38 billion over 4 consecutive trading days. What's much more worrying is that Bitcoin has been unable to keep up levels above $94,000 over the past month, despite Strategy (MSTR US) adding $1.25 billion price of BTC. The Michael Saylor-led company announced its largest Bitcoin purchase since July 2025 on Monday.
While Bitcoin could act instead hedge to the standard economic system, there may be little sign that a crisis of confidence within the US dollar is developing. Despite the $601 billion budget deficit recorded within the last three months of 2025, US government debt has retained its investment grade status. Meanwhile, 5-year Treasury yields have remained below 3.8% in recent months.
US dollar strength index (left) in comparison with 5-year US Treasury yield. Source: TradingView
Had traders prepared for an impending economic downturn, the U.S. dollar would likely have weakened against a basket of foreign currency echange as measured by the DXY index. Instead, the US Dollar Strength Index recovered to 99 from a low of 96.7 at the tip of November 2025. Therefore, despite the strong rally in precious metals, there may be currently no clear evidence of a devaluation trade.
Ultimately, the appeal of Bitcoin and cryptocurrencies stays muted, as reflected in ETF flows and muted demand for leveraged BTC positions, suggesting that the likelihood of a surprise rally towards $105,000 within the near term is comparatively low.
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