Bitcoin Holds Near $65,700 as AI Inflation Fears Offset ETF Inflows

Bitcoin Stuck in a Tight Range

Bitcoin is trading near the $65,700 level on Thursday, unable to break decisively higher despite strong inflows into spot exchange-traded funds. The world’s largest cryptocurrency has been rangebound for the better part of the week, caught between bullish fund demand and macroeconomic headwinds.

Data from multiple exchanges shows Bitcoin oscillating within a narrow band of $65,200 to $66,100 over the past 24 hours. The price action reflects a market trying to digest conflicting signals.

ETF Demand Remains a Bright Spot

Spot Bitcoin ETFs have seen robust buying this month. Fund managers report consistent net inflows, with institutional investors treating these products as a regulated gateway to crypto exposure. The trend has been steady since the Securities and Exchange Board of India and other global regulators gave their nods to such funds.

Market participants say the ETF bid is providing a floor under prices. “We are seeing fresh money come in through ETFs every week,” one Mumbai-based crypto analyst noted. “That is keeping the downside very limited.”

AI-Led Inflation Fears Cap Upside

But the rally has stalled because of a fresh worry: artificial intelligence-driven inflation. Investors are increasingly concerned that massive corporate spending on AI infrastructure could overheat the economy, forcing central banks to keep interest rates higher for longer.

Higher rates are typically negative for risk assets like Bitcoin. The narrative has gained traction after several US tech giants announced multi-billion-dollar AI investment plans, stoking fears of persistent price pressures. This has led to a cautious tone in broader markets.

Traders are watching the Federal Reserve’s next move closely. Any hawkish signal from the US central bank could push Bitcoin lower, even with ETF demand acting as a buffer.

What to Watch Next

The immediate focus is on whether Bitcoin can take out the $66,000 resistance level with conviction. A breakout above that could open the door to $67,500. A failure to do so might see the cryptocurrency drift back toward $64,000. All eyes are on US inflation data due next week for the next directional cue.