This column was co-written by Frank Chaparro, director of special projects at The Block, and Laura Vidiella of MNNC Group. The views expressed in this column are their own and do not reflect the opinions of their employers.

This is a challenging period for bitcoin’s price.

We’ve written extensively about the various tailwinds and headwinds affecting the industry, which primarily come down to macroeconomic factors and market flows. When both are favorable, we’d expect bitcoin’s price to rise. At first glance, we’re seeing a mix of bullish signals, yet bitcoin remains stuck in the doldrums.

Starting with the macro picture, the market received positive news from the latest FOMC meeting. While Fed Chair Jerome Powell emphasized that the 50 basis-point rate cut shouldn’t set the pace for future cuts, the consensus is that more rate reductions are likely. Bitcoin BTC +0.15% initially took its time reacting but eventually climbed to its highest level since late August—$63,000—and has been hovering around that level ever since.

Bitcoin is also shrugging off positive political developments. Vice President Harris pledged support for the crypto sector during a pitch to NYC donors — a long-awaited embrace of the industry by a 2024 presidential hopeful. Meanwhile, former President Trump, who recently visited the Bitcoin-themed bar Pubkey, is climbing in the polls. A New York Times poll shows Trump leading Harris across the Sun Belt, with a 5% advantage in Arizona, 4% in Georgia, and 2% in North Carolina. Despite Trump’s self-proclaimed crypto-friendly stance, bitcoin’s price remains unchanged.

Even flows look promising. Digital asset investment products recorded their second consecutive week of inflows, totaling $321 million. Bitcoin led the way with $284 million in inflows, while Ethereum faced its fifth straight week of outflows, losing $29 million.

So, what’s holding bitcoin back?

Even though the political and macro picture seems to be improving, there’s still too much uncertainty. Yes, we’re now in a rate-cutting cycle, but it’s unclear how long the cycle will last or how deep the cuts will be. It’s also uncertain whether we’re heading for a recession or a soft landing. On the political front, it’s still not clear who will occupy the White House next January. Until we have more clarity on both fronts, we may have to accept a lackluster bitcoin market.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

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