Profit-Taking and Monetary Policy Uncertainty Weigh on Bitcoin Despite Strong Institutional Inflows

Riyadh | EcoPulse24

The cryptocurrency market experienced notable selling pressure at the beginning of the week, driven by rising uncertainty surrounding the trajectory of U.S. monetary policy and increased profit-taking activity. Bitcoin fell by approximately 3% to $92,563.09, while Ether declined by more than 4% to $3,200.99 during Monday morning trading.

In terms of liquidity and risk, these movements triggered liquidations worth $865 million in Bitcoin positions, highlighting the market's heightened sensitivity to short-term volatility. Conversely, Bitcoin exchange-traded funds (ETFs) attracted $1.4 billion in positive weekly inflows - the highest since early October - demonstrating continued institutional interest in high-risk assets despite price corrections.

Data from Glassnode indicated ongoing accumulation among medium and large wallets, with those holding between 10 and 1,000 Bitcoins collectively amassing around 110,000 BTC over the past 30 days. This represents the strongest monthly accumulation rate since Bitcoin's drop to $15,000 during the FTX crisis three years ago.

Analysis

The current market dynamics reveal a temporary disconnect between short-term price movements and longer-term institutional inflows. The prevailing pressures reflect risk management and profit-taking amid an unclear monetary policy environment, while accumulation behavior and fund inflows suggest underlying confidence remains intact. This divergence is likely to sustain elevated volatility in the near term, with the broader trend depending on the clarity of monetary policy and the persistence of risk appetite.