- The Federal Reserve's hawkish expectations limit potential gains

Nevertheless, gains in Bitcoin and other high-risk assets may remain limited after last week's hawkish Federal Reserve meeting. While the Fed kept interest rates unchanged, nine out of eighteen policymakers expect to raise them this year, and new Federal Reserve Chair Kevin Wessel reaffirmed the central bank's 2% inflation target, reinforcing the idea of prolonged higher interest rates.

Attention this week is turning to the core Personal Consumption Expenditures Price Index, the Fed's preferred inflation measure, which could provide further clues about the interest rate path.

- Outflows from exchange-traded funds (ETFs) hit a new record high.
Institutional demand remains weak after Bitcoin ETFs recorded their sixth consecutive week of net outflows. However, the pace of these outflows has slowed sharply in recent weeks, suggesting that the most intense phase of institutional selling may have ended.

Outflows from Bitcoin ETFs totaled $6.35 billion over the past thirty days, the largest decline in thirty days, as institutional investors reduced their market exposure. This coincided with a sharp correction in Bitcoin's price, which fell 17% during the same period.

Several factors contributed to the decline in ETF sales, including:

- Rising Treasury yields.
- Fading hopes of rate cuts.
- Capital shifting to AI-related assets.
However, selling pressure has significantly eased in recent sessions. Weekly outflows decreased by 87% from their peak in early June, falling from $1.72 billion in the week ending June 5 to $226 million last week.

Meanwhile, Bitcoin has maintained stability above the key support level of $60,000, indicating resilience in the face of ongoing outflows. This suggests that long-term investors may be absorbing a large portion of the supply offered by ETF investors.

The sharp slowdown in redemption flows indicates that the peak selling pressure may have been surpassed. Still, ETF outflows remain negative, and a sustained return of inflows will likely be necessary to confirm Bitcoin's price stability.

Currently, Bitcoin appears to be caught between improving macroeconomic conditions and weak institutional demand, trading within a narrow range ahead of key U.S. inflation data.
$BTC