Bitcoin rallies thwarted by fading Fed rate cut odds, softening US macro

Bitcoin has repeatedly failed to sustain rallies above $92,000, with market participants citing various reasons, though the primary constraint appears to be shifting investor sentiment toward safer assets. The S&P 500 remains near its all-time high, contrasting with Bitcoin's 30% drop from its peak, indicating increased risk aversion. Factors suppressing Bitcoin include the Federal Reserve's balance sheet reduction draining liquidity, and growing uncertainty about the Fed's ability to cut interest rates below 3.5% in 2026, evidenced by falling rate cut probabilities and firm US Treasury yields. Furthermore, softening US macroeconomic indicators, such as disappointing retail earnings and disruptions from a government funding shutdown, coupled with economic weakness in Japan, are diminishing Bitcoin's appeal as a hedge against uncertainty. Consequently, as investors become more risk-averse, the positive impact of potential future stimulus on risk-on assets like Bitcoin is waning, limiting its near-term upside.

(Source：Cointelegraph)