Key takeout
Why is Bitcoin falling amidst the economic concerns of the US?
The decline in Bitcoin is linked to increasing uncertainty in US policy, with institutional investors subtracting $466 million from the BTC ETF amid concerns about the heightened volatility.
How do retail and institutional investors respond?
While institutions sell, retail investors have shown a weak accumulation, putting even more downsides at risk unless they increase the pressure.
Bitcoin [BTC] It recorded one of the weakest performances in recent years, dropping sharply to $112,000.
Despite being ranked 8th among the most valuable assets, check out Metaplatform (Facebook) and Saudi Aramco. BTC is under threat as the economic uncertainty in the United States grows deeper.
Institutional investors are responding, with wider sentiment indicating a clear shift in Bitcoin’s growth outlook.
Macro uncertainty moves against Bitcoin
The uncertainty index of US economic policy has recently skyrocketed to one of the highest levels, with warning signs flashing for risky assets.
According to Alphractal, between September 20th and 22nd, the index surged to 617.32, adding 456.23 points in just a short period of time.
Source: Alphractal
Historically, such spikes have placed emphasis on risk assets, including the S&P 500. Analyst Joao Wedson linked the increase to a series of US policies and government actions.
“This increase is driven by high trade tariffs, election uncertainty, and fierce debate over the Federal Reserve decisions on interest rates and fiscal deficits, which has generated extensive media coverage of policy ambiguity.”
Institutional investors are responding by selling from Bitcoin. The risk profile to asset compensation remains weak, further increasing the chances of downward volatility.
Institutional investors are retreating
Institutional players began the week with a weak attitude.
Data from SOSO values showed that Bitcoin US Spot Exchange-Traded Funds (ETF) recorded a $466 million spill, reaching $363.17 million on September 22nd.
Source: SosoValue
This shows a clear turn to a safer asset. Valr CEO and co-founder Farzam Ehsani described the move to Ambcrypto as a move to “Safe-Haven Trade.”
He added:
“Recent performance of the crypto market and [Bitcoin] Liquidity events amplify volatility, vulnerability to beliefs among market participants, and create short-term rotations in concrete shelters like gold. ”
Gold then hit a new lifetime high of $3,791, recording a strong profit for the year of 44% compared to 21% of Bitcoin. Ehsani argued that Bitcoin’s misperformance weakened investors’ convictions for its role.
“Investors are denounced for their role as a hedge against macro uncertainty. They remain skeptical that BTC can fulfill ‘digital gold’ papers during periods of macrostress and dollar strength,” he said.
Retail investors try to bid
Meanwhile, the Bitcoin exchange reserves have immersed slightly amid the turbulence of the market. A reduction in reserve for the overall centralized exchange usually indicates that investors move their assets to move into private wallets.
Upon publication, the reserves fell to just 348 btc ($39.5 million). This is meaninglessly less compared to sales pressure from the institution’s players.
Encryption
Retail investors need to significantly increase their purchases to offset ongoing sales. Without this support, Bitcoin is slipping further down the charts, bleaking the overall market outlook.