Bitcoin is finding room to bounce, but not yet the fuel to run.
The macroeconomic backdrop has improved enough to give the bulls something to work with. Cooling headline inflation has strengthened expectations of three rate cuts this year, reviving the familiar playbook that looser monetary policy supports risky assets.
And it could signal the possibility of liquidity slowly returning after months of tight financial conditions for crypto markets.
But you have to be careful not to read too much into that change. The Federal Reserve is unlikely to embark on an aggressive easing cycle. Rather, he appears willing to take a measured approach that rebuilds liquidity gradually. That creates an environment where Bitcoin can organize tactical rallies but struggle to maintain them.
Bitfinex analysts describe the market as one prone to wave moves rather than clean breakouts.
“In this environment, volatility remains likely,” the company said in a note shared with CoinDesk. “Tactical bullish moves can occur when positioning becomes too defensive, but a lasting structural advance will require clearer confirmation of both macro disinflation trends and sustained spot demand.”
Spot recoveries continue to find steady sales. Each bounce is absorbed more smoothly than at the beginning of the quarter, suggesting some stabilization.
The Overnight Tape is a good example. Bitcoin traded as high as $68,500 before falling during the US afternoon and falling below $66,000, a move that aligned with a stronger dollar and hawkish minutes from the Federal Reserve. That kind of intraday reversal is the market’s way of saying that rallies are still fragile and that traders are rushing to sell the moment macroeconomic conditions become even slightly less friendly.
“It is alarming that Bitcoin’s dynamics reflect the recent strengthening of the dollar. When investors become convinced that the rising dollar is a trend, there can be a sharp increase in volatility,” Alex Kuptsikevich, chief market analyst at FxPro, said in an email.
“Volatility seems to have died down in this market, while stock indices are much livelier. There, investors are actively buying dips, relying on the support of important moving averages: 50 days for the Dow Jones and Russell 2000 and 200 days for the Nasdaq100. The crypto market is now below its 50-day and 200-day curves by 17% and 31%, respectively,” he said. added.
Meanwhile, sentiment remains fragile, as one indicator of cryptocurrency fear has printed single digits on nine of the last fourteen days, territory rarely seen outside of previous cycle lows.
At the same time, stablecoin outflows from major exchanges point to tighter liquidity, and long-term holders have shown signs of stress comparable to the later phases of the bear market in 2022, according to Glassnode.
For now, Bitcoin appears caught between improving macro optics and supply stubbornness. Tactical advantage is still possible, especially when positioning leans too defensively.
However, a lasting advance will likely require clearer evidence of disinflation, a weaker dollar and consistent spot demand. Until then, the road up may be uneven.
