Bitcoin under pressure as ETF outflows and US rate-hike bets rise

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).