Bitcoin investors retreat to sidelines ahead of Fed and BoJ decisions

Nansen senior research analyst Nicolai Søndergaard noted that while traders have not exited the market, they are avoiding risk until the Federal Reserve clarifies its path. Bitcoin remains range-bound, with analysts identifying $76,000 and $83,000 as the critical thresholds for a genuine directional move. Without a breakout supported by high spot-market volume, sentiment remains cautious. This hesitation is reflected in U.S. spot Bitcoin ETFs, which saw approximately $463 million in net outflows last week, suggesting that institutional appetite has cooled as financial conditions tighten.

Beyond the Fed, the Bank of Japan represents a significant underpriced risk. Analysts warn that a potential rate hike there could squeeze yen-funded carry trades, putting downward pressure on crypto positions that rely on cheap liquidity. Adding to the regulatory uncertainty, a U.S. Senate vote on the CLARITY Act looms, with prediction markets signaling a lower probability of passage. Should the bill fail, the combination of stalled crypto legislation and hawkish central bank projections could exacerbate volatility, forcing investors to weigh the impact of shifting real yields against the stability of institutional demand.