Bitcoin recently outperformed both United States and European equities following the United States Consumer Price Index inflation report on Tuesday. This decisive move marks a strong recovery after weeks of trading sideways near recent lows. This price action is a structural shift rather than a random fluctuation.
The current market dynamics suggest that selling pressure is exhausting. Buyers are increasingly positioning themselves and waiting for positive macroeconomic catalysts to drive the next leg higher. This exhaustion of sellers often precedes significant trend reversals, especially when converging macroeconomic and onchain data support this trajectory. Independent analysis reveals patterns that mainstream narratives frequently suppress, and the current data strongly supports a bullish structural foundation for the future of decentralised finance.
The primary catalyst for this renewed momentum is undeniably macroeconomic relief. The latest Consumer Price Index report showed an unexpected 0.4 per cent monthly drop in inflation. This represents the largest cooling in inflation since April 2020. With annual inflation slowing down, macro investors have renewed confidence that the Federal Reserve may hold interest rates steady or begin cutting them in the near future. This expectation drives capital back into risk assets like cryptocurrencies.
I have long emphasised the correlation between traditional financial markets and digital assets. When macroeconomic conditions ease, liquidity inevitably seeks higher yields, and Bitcoin stands as the premier beneficiary of this global capital rotation. The market correctly prices in this shifting monetary policy landscape before official rate decisions occur, demonstrating the efficiency of decentralised markets compared to legacy systems.
Onchain metrics further validate this constructive outlook. Bitcoin continues to trade above the average on-chain cost basis of all investors. It remains below the short-term holder cost basis near US$69,000. This specific positioning provides deep insight into market psychology.
Long-term holders have largely stopped realising profits during this period. Furthermore, recent outflows have been increasingly sold at a loss. These behaviours reflect classic signs of a late-stage bear market where weak hands have already capitulated. The remaining supply sits in the wallets of conviction buyers who understand the long-term value proposition of decentralised financial infrastructure. We can clearly observe that buyers absorbed much of the selling pressure from the decline in June.
The Glassnode Accumulation Trend Score showed broad buying activity across both small and large wallet cohorts as Bitcoin traded near its recent lows. This broad accumulation indicates retail participants and sophisticated whales recognise the value at these price levels. The accumulation has since moderated as prices stabilised, signalling a healthy natural equilibrium rather than frantic speculation.
Institutional flows also reflect clear signs of improvement, even amidst broader market caution. United States spot Bitcoin ETF redemptions slowed considerably from the heavy outflows we witnessed in June. This deceleration suggests institutional selling pressure is finally stabilising. Bitcoin funds netted US$181 million in inflows on Tuesday.
This positive movement partially offset the US$424 million in outflows recorded the day before. While this reflects a minor recovery, the unwinding lacks support from strong, aggressive buying. This nuanced institutional behaviour aligns perfectly with my independent analysis of traditional finance entering the crypto space. Until inflows return and hold consistently, this remains a market where institutions have stopped fleeing but have not started buying aggressively.
Traditional financial players exercise extreme caution. They require confirmed macroeconomic shifts and sustained price stability before committing fresh capital. This cautious approach is rational, and it highlights the friction between legacy regulatory frameworks and decentralised systems. Traditional financial tests like the Howey test remain unsuitable for evaluating these decentralised crypto systems, creating temporary hesitation among institutional allocators.
The derivatives market provides additional confirmation of this shifting sentiment. Traders have steadily shifted away from bearish positioning over recent weeks. The options put-to-call ratio has fallen to its lowest level of the year. This decline indicates a substantially reduced demand for downside protection.
Smart money is adjusting its risk models, recognising that the probability of a severe downward continuation has diminished. Perpetual futures funding rates have remained slightly positive during this recovery phase. This specific metric suggests that long positioning has not become crowded.
In my experience analysing market liquidity and derivatives volume, crowded long positioning often precedes sharp, corrective liquidations. Funding rates remaining slightly positive indicate a sustainable and organic recovery. Technically, Bitcoin is currently hovering around US$64,660. This price action reflects a strong multi-day push that reclaimed the crucial US$65,000 psychological milestone.
The recent upward momentum accelerated significantly when Bitcoin broke back over the technical resistance levels between US$58,000 and US$62,000. This breakout triggered a massive wave of short covering. Traders betting on further price drops bought back their positions to limit losses. This forced buying acted as rocket fuel, pushing the price decisively past the resistance zone.
Three powerful, converging factors drive this recent upward momentum.
- First, easing United States inflation data has provided essential macroeconomic relief.
- Second, massive institutional ETF inflows, including over US$180 million in net inflows in a single day, led heavily by funds like BlackRock iShares Bitcoin Trust, demonstrate continuous whale accumulation that absorbs market supply and applies strong upward price pressure.
- Third, short covering and forced liquidation cleared out bearish leverage, fuelling the breakout. These elements form a robust foundation for the next major expansion phase of digital assets.
I am looking forward to more changes.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.