Macro Factors and ETF Inflows Influence Bitcoin (BTC) Price Rebound

Macro Factors and ETF Inflows Influence Bitcoin (BTC) Price Rebound - Blockchain.News

Bitcoin (BTC) has shown a significant rebound from its recent lows, as detailed in a report by Bitfinex Alpha. The cryptocurrency's price recovery, climbing from $112,000 to reclaim the $115,800 range, was primarily driven by a shift in ETF flows. Early August saw a reversal from outflows to $769 million in net inflows over a span of three sessions, signaling renewed investor confidence.

ETF Inflows and Crypto Treasury Accumulation

This positive price movement is further supported by the steady accumulation of digital assets by crypto treasury firms, which now collectively hold nearly $90 billion. Despite the price surpassing the $119,500 threshold, it remains uncertain if this upward momentum will sustain, as the market remains sensitive to macroeconomic influences.

Macro Influences and Market Sensitivity

With 70% of short-term holder supply still in profit and profit-taking activity cooling to 45%, the market is balanced yet highly reactive to macroeconomic catalysts. Key U.S. inflation data expected this week could be pivotal, potentially pushing Bitcoin towards new all-time highs or causing a retreat to $110,000.

Economic Challenges and Market Volatility

The broader financial landscape is experiencing volatility due to various factors, including shifting trade policies, evolving bond market dynamics, and softer economic data. The U.S. is facing potential tariff implementations that may increase costs, disrupt supply chains, and impact employment. Concurrently, the bond market's rising term premium of 0.65% reflects increasing uncertainty over future Federal Reserve policies, particularly if inflation escalates post-tariffs.

Labour Market and Inflationary Pressures

The labor market is showing signs of cooling, with slower job growth and downward revisions to prior employment data. Rising service-sector input costs are contributing to inflationary pressures; however, improved worker productivity, up by 2.4% in Q2, may help sustain economic growth despite a softer hiring environment.

Institutional Moves and Policy Shifts

In the cryptocurrency sector, BitMine Immersion Technologies has emerged as a significant player, amassing over 833,000 ETH valued at $2.9 billion in just five weeks. This positions them alongside other major institutional investors like ARK, Pantera, and Galaxy Digital. Additionally, recent policy changes under President Trump, including an executive order permitting alternative assets such as digital currencies in retirement plans, could further drive mainstream adoption. Another order aims to protect crypto firms' access to banking services, dismantling barriers from previous regulatory regimes.

For more detailed insights, visit the Bitfinex Alpha blog.

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