Fed Rate Hike Fears and $465M ETF Exodus Drag Bitcoin to Weekly Low

Bitcoin fell as much as -3% to $63,100 on July 28, its lowest level in 11 days, as traders assigned roughly a one-in-three probability to a surprise Federal Reserve rate hike at the July 29 FOMC meeting.

This would compound a crypto sell-off already strained by more than $465M in US spot Bitcoin ETF outflows recorded on July 23 and 24, as well as yesterday’s (July 27) modest -$11M outflow.

This is not simply a Bitcoin-specific repricing. It is a macro de-risking event in which rate expectations are the operative variable, and the ETF flow data confirms that institutional participants moved first.

(SOURCE: Polymarket)

Fed Rate Decision Mechanics: How a One-in-Three Hike Probability Moves BTC Price

The mechanism functions as follows: rising rate expectations increase the opportunity cost of holding non-yielding risk assets, prompting systematic and discretionary managers to trim exposure ahead of the FOMC decision.

Citadel Securities has forecast a 25 basis-point hike on July 29, characterizing it as a move that would strengthen Federal Reserve Chair Kevin Warsh’s credibility in the inflation fight – a framing that, even if the hike does not materialize, anchors the hawkish read of the meeting.

… Continue reading the full article at the original source below.