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Bitcoin under pressure as ETF outflows and US rate-hike bets rise
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Bitcoin under pressure as ETF outflows and US rate-hike bets rise
Economies.com
2026-09-02 12:00 UTC
Bitcoin (BTC) remains under pressure, trading near $77,600 on Wednesday after falling 1.45% in the previous session.
Outflows from exchange-traded funds (ETFs), higher energy prices amid renewed tensions between the United States and Iran, and growing expectations that the Federal Reserve will raise interest rates are weighing on the upside prospects for the world’s largest cryptocurrency.
Early signs of caution among institutional investors
Institutional appetite for Bitcoin is showing early signs of weakness. Data from SoSoValue showed that spot Bitcoin ETFs recorded $236.46 million in net outflows on Tuesday, pointing to growing caution among investors.
If those outflows persist and intensify over the course of the week, Bitcoin could extend its price correction.
Inflation risks limit Bitcoin gains
The escalating conflict in the Middle East has pushed energy prices higher, with West Texas Intermediate (WTI) crude reaching an intraday high of $90.78 a barrel on Wednesday. Higher crude oil prices are fueling inflation concerns among traders and strengthening bets on interest rate hikes by the Federal Reserve.
Moreover, US Central Command (CENTCOM) said on Tuesday that US forces had targeted positions belonging to Iran’s Islamic Revolutionary Guard Corps (IRGC).
In response, Iran escalated the confrontation and launched intensive ballistic missile and drone attacks on US interests in Bahrain, Kuwait and Jordan on Wednesday. This is keeping the geopolitical risk premium elevated across markets, supporting oil prices and the US dollar while weighing on risk appetite.
At the same time, investors remain concerned that higher energy prices could reignite inflationary pressures and force major central banks, including the Federal Reserve, to adopt a more hawkish stance.
Adding to those concerns, comments from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium on Friday continue to reinforce expectations for an interest rate hike in September.
According to CME’s FedWatch Tool, traders are currently pricing in around a 70.2% probability that the Federal Reserve will raise borrowing costs at its September 15-16 policy meeting, up from 41.43% on Monday of last week.
That, combined with concerns over government debt, has deepened the selloff in global bond markets and pushed the benchmark 10-year US Treasury yield to its highest level since January 2025.
Higher Treasury yields could weigh on Bitcoin by reducing the appeal of riskier assets and increasing the opportunity cost of holding non-yielding assets such as Bitcoin.
Bitcoin’s current weakness appears to be a liquidity-driven correction
Dean Chen, an analyst at Bitunix, told FXStreet in an exclusive interview that the current weakness appears more like a liquidity-driven correction than the beginning of a structural market breakdown.
“If the cost of capital falls and ETF flows stabilize, Bitcoin can recover, but until then, macro liquidity remains the dominant constraint,” Chen said.
According to Chen, the recent pullback is being driven primarily by higher interest rates and increased competition for global liquidity, rather than signaling a deeper deterioration in Bitcoin’s market structure.
ETF outflows, higher energy prices and growing expectations that the Federal Reserve will keep interest rates elevated or tighten monetary policy further are increasing the opportunity cost of holding Bitcoin.
Higher energy prices are particularly important because, if they reinforce inflation expectations, they could further limit the central bank’s ability to ease monetary policy.
However, Chen does not view the current weakness as an automatic signal that a bear market is accelerating. Lower Treasury yields, a less hawkish Federal Reserve and stabilizing ETF flows could give Bitcoin room to recover as broader liquidity conditions improve.
“The key variable is whether global liquidity continues to deteriorate, not simply how far Bitcoin falls in the short term,” Chen said.
At this stage, the analyst believes the market is repricing assets, while Bitcoin continues to search for a price level that global capital is willing to support in an environment where the cost of capital is rising.
Oil prices fall despite continued US-Iran attacks
Economies.com
2026-09-02 11:44 UTC
Oil prices fell on Wednesday after surging to their highest levels in more than a month earlier in the session, as traders weighed the risk of supply disruptions following overnight US and Iranian strikes against signs that crude supplies continue to reach global markets.
Dollar hits three-week high against sterling as focus turns to Middle East and UK bonds
Economies.com
2026-09-02 11:12 UTC
The British pound fell to a three-week low against a strengthening US dollar on Wednesday, as investors closely monitored the conflict in the Middle East and renewed selling pressure in the UK government bond market.
Gold extends losses to four-week low as US dollar and Treasury yields rise
Economies.com
2026-09-02 08:53 UTC
Gold prices fell in European trading on Wednesday, extending losses for a fourth consecutive day and hitting a four-week low, as selling continued under pressure from a stronger US dollar and another jump in the benchmark 10-year US Treasury yield.
Source: www.economies.com