Bitcoin Hits $85,071 as Fed Rate-Cut Odds Surge; Spot ETFs See $2.47B in Redemptions

Bitcoin price hits $85,071 as Fed rate cut odds jump to 69.40%. Spot ETFs suffer $2.47B in redemptions, marking the worst outflow month since January launch.

Bitcoin price climbed to $85,071 this week as markets reacted to a material shift in monetary expectations: Fed rate cut odds jumped to 69.40%. The sudden rise in hopes for cheaper borrowing costs pushed BTC higher, driven by investors who view looser policy as bullish for risk assets and crypto. For traders watching macro signals, the correlation between Fed rhetoric and Bitcoin price action remains a dominant theme.

Despite the rally, spot Bitcoin ETFs faced a damaging outflow cycle. Fund flows showed $2.47 billion in redemptions, the largest monthly outflow since these products launched in January. The contrast between a higher BTC price and heavy ETF redemptions points to a split in market behavior — price-driven momentum on one side and portfolio rebalancing or profit-taking on the other. Spot ETFs initially boosted institutional access to Bitcoin, but recent withdrawals underscore how quickly sentiment can shift.

What’s driving this divergence? A few factors appear to be at play. First, short-term traders often chase price moves generated by macro headlines, while long-term investors may use ETF structures to lock in profits or reduce exposure. Second, the spike in Fed rate cut odds may have prompted allocations away from ETFs into other risk assets or cash, even as spot Bitcoin benefited from renewed bullish positioning. Finally, liquidity dynamics in ETF markets can amplify outflows when several large holders redeem simultaneously, creating temporary pressure on fund managers.

For BTC investors and crypto market watchers, the current environment is a reminder to balance macro awareness with on-chain and fund-flow signals. While the surge to $85,071 highlights continued appetite for Bitcoin, the $2.47B in redemptions signals caution among some institutional channels. Monitoring future Fed communications, ETF inflows/outflows, and spot market liquidity will be essential for anticipating next moves.

Outlook: If Fed rate cut odds remain elevated, Bitcoin could sustain upward momentum as lower rates support risk-taking. However, persistent ETF outflows would suggest profit-taking or reallocation among larger holders, potentially increasing short-term volatility. Traders and investors should weigh both macro catalysts and fund-flow trends when positioning for the weeks ahead.

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