Bitcoin Pullback After FOMC, Bulls Keep Buying

Key takeaways:
- US-listed spot ETFs and MicroStrategy’s purchases continue to underpin Bitcoin demand
- Low leverage among bulls limits the risk of large cascade liquidations on further dips
- Rising inflation and weaker fixed-income prospects could prompt a rotation from gold into Bitcoin

Bitcoin slipped roughly 7% after touching about $76,000 on Tuesday, retreating as US equities softened. The sell-off followed a jump in oil after an Israeli strike on Iran’s largest gas processing plant and hotter-than-expected US producer prices. Despite the pullback, the broader bullish trend appears intact.

Macro signals have turned slightly more risk-off: the S&P 500 traded about 4% below its record high, and wholesale prices rose 3.4% year-over-year in February — the largest increase in a year. As oil topped $98, markets pushed back expectations for Federal Reserve easing in 2026. The CME FedWatch Tool showed the odds of unchanged rates through September falling to roughly 42% from 89% a month earlier.

Heightened geopolitical risk and stickier inflation have nudged investors toward safer assets, but bond-market pricing doesn’t indicate panic. The 2-year Treasury yield sits near 3.71%, while the Cleveland Fed’s 2-year inflation expectation is about 2.27%, leaving an inflation-adjusted return near 1.44%. In episodes of extreme fear, real yields typically fall toward zero or negative; current readings are not at that extreme.

Importantly for crypto risk dynamics, bulls are not heavily leveraged. Recent upward moves in Bitcoin have been driven mainly by spot accumulation — particularly through US spot ETFs — and continued large purchases from MicroStrategy. That reduces the probability of cascade liquidations if prices drop modestly further.

Data from CoinGlass suggests around $450 million in forced liquidations of leveraged long futures would be needed to push BTC down to roughly $68,000. That represents under 1% of the approximately $49 billion aggregate open interest. Meanwhile, perpetual futures funding rates show rising short-side leverage, indicating bears are taking on more leverage than longs. A negative funding rate — where shorts pay to hold — remained in place even as BTC reached $76,000, reinforcing that spot demand has been the primary driver.

Gold has eased recently, trading near $4,900 after holding above $4,800 for weeks. If fixed-income returns weaken amid higher inflation expectations, some investors could rotate from gold into Bitcoin, which might support a more sustained rally.

Bottom line: the recent dip looks like a corrective move amid worsening macro headlines rather than a breakdown of Bitcoin’s bullish momentum. Low long-side leverage and continued spot buying make a deeper, disorderly sell-off less likely in the near term.

This is not investment advice. All trading and investing carry risks. Readers should conduct their own research and consider consulting a professional before making financial decisions.