Spot Bitcoin ETFs have attracted $1.16 billion in inflows over the past week, bringing total weekly inflows to $2.52 billion. This spike in investment could be at risk depending on the Federal Reserve's policy decision today, as experts warn that the current bullish sentiment may not withstand macroeconomic pressures.

The recent inflow streak is highlighted by last Tuesday's record single-day inflow of $250.92 million, according to SoSoValue. This influx indicates a robust interest from investors who appear to be increasingly confident in Bitcoin's potential to weather current economic storms. Investor confidence appears to be rising despite turbulent geopolitical events, with Bitcoin gaining approximately 14% following the U.S. and Israel's military actions against Iran. Such a performance stands in stark contrast to traditional assets like gold and the S&P 500, which have declined by 6.60% and 0.17%, respectively, showcasing Bitcoin's resilience during economic uncertainty.

Rachel Lin, CEO of decentralized crypto exchange SynFutures, noted that this divergence may indicate a “classic seller exhaustion” phase. This suggests that institutional engagement is returning as forced selling subsides. Lin emphasizes that once forced selling diminishes, even modest inflows can have an outsized impact on price and flows. However, she cautioned that while these inflows bolster Bitcoin's recovery prospects, they also render the cryptocurrency vulnerable to shifts in macroeconomic conditions. If inflation remains persistent and the Fed opts to maintain higher interest rates, this could jeopardize the current bullish trend.

The broader crypto market’s relief rally and sustained Bitcoin ETF inflows face a critical test as the Federal Open Market Committee (FOMC) meeting unfolds. Market participants are keenly aware that the Fed's policy decision could either extend or unwind the current inflow streak. As the meeting progresses, the crypto market is expected to react cautiously. Gracy Chen, CEO of crypto exchange Bitget, stated that any dovish signals from the Fed could support risk assets, including Bitcoin. Conversely, a hawkish tone may induce short-term volatility, reflecting the precarious balance in market sentiment.

Currently, market participants assign a 98.9% probability that the Fed will hold interest rates steady between 3.50% and 3.75%. This consensus indicates a broader recognition of the Fed's cautious approach amid ongoing economic uncertainty. Meanwhile, users on Myriad, a prediction market, see only an 11% chance of a significant rate cut before July, further emphasizing the expectation of stability in Fed policy.

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Following a recent peak near $75,600, Bitcoin's price has retreated by 1.9% to around $72,400, according to CoinGecko. This fluctuation reflects the volatility inherent in cryptocurrency markets, especially leading up to significant economic announcements. Nevertheless, optimism prevails among Myriad users, with a 56% likelihood projected for Bitcoin to reach $84,000 next, rather than dropping to $55,000. This indicates a complex interplay between market sentiment and macroeconomic influences as traders navigate the landscape ahead of the crucial FOMC meeting.

The ongoing situation exemplifies how Bitcoin's dynamics are evolving in response to both internal market forces and external economic pressures. The sustained inflows into Bitcoin ETFs not only highlight the growing institutional interest but also suggest a shift in how investors view Bitcoin as a potential hedge against traditional market downturns. As investors become more engaged, Bitcoin's path forward will heavily depend on broader economic indicators and Fed policy decisions.

In the context of rising geopolitical tensions, particularly in the Middle East, Bitcoin's recent performance stands out. The cryptocurrency has managed to maintain its bullish trajectory even as gold and traditional stock indices face downward pressure. This suggests that investors may be increasingly viewing Bitcoin as a viable alternative asset, one that can potentially offer protection against the economic fallout from geopolitical instability.

Experts have previously expressed concerns regarding the sustainability of the bullish ETF streak and the recovery rally. They argue that these trends could unravel if inflation remains sticky and if the Federal Reserve decides to keep interest rates elevated for an extended period. Such macroeconomic catalysts could significantly impact investor sentiment and trading behavior in the crypto market.

As the FOMC meeting approaches, all eyes are on the outcomes that could shape the trajectory of Bitcoin and the broader cryptocurrency market in the coming weeks. The interplay of market sentiment, economic indicators, and Fed policy will be crucial in determining whether the current inflow trends will persist or falter amid external pressures. Investors and market watchers will be closely monitoring today's outcomes, as they could significantly influence Bitcoin's trajectory in the coming weeks.