Bitcoin Extends Losses for a Second Session After FOMC as Institutional Flows Turn Cautious Amid Higher-for-Longer Outlook

Specifically, the FOMC delivered a clearer signal that interest rates are likely to remain elevated for longer, highlighting that the recent oil price shock could reintroduce inflationary pressures. The Fed kept rates unchanged within the 3.5%–3.75% range, while revising its outlook to suggest only one rate cut in 2026. This underscores a more cautious policy stance compared to previous market expectations.

Against this backdrop, the US Dollar Index (DXY) has managed to hold key support levels and stabilize, thereby exerting pressure on risk assets, including Bitcoin. The resilience of the USD, contrary to earlier expectations of weakness, has contributed to a more defensive positioning among investors, particularly as global liquidity conditions remain constrained.

From a flow perspective, Bitcoin ETFs recorded three consecutive sessions of net outflows following heightened volatility around the FOMC event. According to SoSoValue, total net outflows over the past three sessions amounted to approximately $305 million, compared to a prior streak of seven consecutive inflow sessions totaling nearly $1.168 billion. This pattern suggests that ETF flows are currently driven more by tactical allocation rather than structural capital withdrawal, as institutional investors adjust positioning in response to evolving macro conditions rather than exiting the market entirely.

Notably, factors such as rising oil prices and escalating geopolitical tensions have been present since late February, yet Bitcoin remained largely range-bound around the 70,000 USD level during that period. This indicates that such risks had already been partially absorbed by the market. However, following the FOMC meeting and the Fed’s reaffirmation of a “higher for longer” stance, these factors are now being repriced through the lens of inflation expectations and policy implications, thereby triggering the current corrective move.

Overall, the recent decline in Bitcoin does not stem from new information, but rather reflects a broader adjustment in macro expectations. While the medium-term structure remains intact, near-term downside risks may persist if the US dollar continues to hold strength and ETF inflows do not resume more decisively.