Bitcoin Forecast: Demand Activity Shows Signs of Moderation

As the trading week continues, one of the themes becoming increasingly visible in Bitcoin's price action is a growing sense of neutrality. Over the last four trading sessions, the volatility that was evident weeks ago has declined significantly, with average price fluctuations now hovering around 1.00%, a considerably smaller move compared to the 5.00% daily swings seen recently. For now, this slowdown reflects a loss of momentum within the market and suggests that demand is no longer displaying the same level of aggressiveness observed in previous weeks, a dynamic that could eventually lead to a more pronounced period of indecision in the sessions ahead.

Factors Limiting Demand for Bitcoin

Over recent trading sessions, several factors have emerged that may be affecting confidence across risk markets. First, a new series of U.S. strikes against Iranian targets has reduced expectations of a meaningful diplomatic resolution in the short term and has once again increased uncertainty surrounding potential inflationary pressures.

This environment is also being reinforced by the Federal Reserve's current stance. Market expectations have shifted following a series of inflation reports that continue to show limited progress in reducing price pressures, while tensions in the Middle East could also keep energy-related inflation risks elevated. As a result, the CME Group probability matrix now reflects a probability above 68% that interest rates could rise toward the 4.00% area at the next policy meeting scheduled for September 16.