Bitcoin builds energy for new highs as US stagflation risk, tariff war, Fed rate cuts loom

3 hours ago

Key takeaways:

Bitcoin spent the week warring to clasp supra $107,000, but speech inflows stay astatine historical lows arsenic retail investors take to beryllium connected the sidelines.
Stagflation becomes a existent hazard arsenic US maturation slows, but Fed complaint cuts could hole the concern and supercharge Bitcoin price.
Onchain information shows Bitcoiners accumulating, suggesting the adjacent breakout volition hap successful the Fall of 2025.

After concisely dipping beneath $99,000, Bitcoin has reclaimed $107,000, fueling hopes of an imminent breakout. Yet, thing feels off. There is nary FOMO and nary retail capitalist stampede connected the bargain side. Just a quiet, uneasy rally driven by funds, whales, and traders, portion onchain enactment looks eerily subdued.

This doesn’t look similar a emblematic bull rally. Beneath the surface, the US system is flashing informing signs, portion the Fed is stuck, torn betwixt warring ostentation and supporting a weakening economy.

In specified conditions, Bitcoin could thrive arsenic a hedge against uncertainty. But tin a marketplace built connected equilibrium sheets—not belief—really interruption to caller highs? With stagflation whispers increasing louder, the reply whitethorn travel this fall.

Should the US brace for stagflation?

The connection “stagflation” whitethorn not person appeared successful Jerome Powell’s semiannual study to Congress connected Wednesday, but it hung dense implicit his remarks. The Chair of the Federal Reserve reiterated that the cardinal slope is “well positioned to wait” until much information clarifies whether President Donald Trump’s tariffs volition trigger a sustained ostentation surge. Meanwhile, caller information signals slowing growth, rising unemployment, and stubborn ostentation —the textbook explanation of a stagflationary environment.

On June 17, Fed officials slashed their GDP forecast to conscionable 1.4% for 2025, down from 1.7% successful March. Inflation projections roseate to 3% from the erstwhile 2.7%, portion unemployment is present expected to deed 4.5%, up from 4.4%.

Private assemblage information confirms the trend. The Monday S&P Global PMI flash speechmaking fell to 52.8 successful June from 53.0 successful May, showing fading momentum. Exports are falling, inventory stockpiles are rising, reflecting the tariff concerns, and user request looks wobbly.

What’s more, connected Thursday, the US Bureau of Economic Analysis revised Q1 existent GDP from -0.3% to -0.5%, confirming the US economy’s fragility. Even much concerning, idiosyncratic depletion maturation dropped to conscionable 0.5%, its weakest since 2020, portion halfway ostentation climbed to 3.8%.

The tariff war, meanwhile, is acold from over. As analysts from The Kobeissi Letter warn, President Donald Trump’s 90-day tariff intermission present lone has 12 days remaining. This means that, without immoderate caller commercialized deals, the US volition instrumentality country-specific ‘reciprocal tariffs’ connected July 9, including tariffs of up to 50% connected EU imports, portion maintaining a planetary 10% baseline tariff.

Meanwhile, commercialized conditions with China stay connected a 90-day intermission pursuing the bilateral statement connected May 14, mounting a abstracted deadline for Aug. 12. While today’s model connected uncommon world metals and the easing of tech restrictions acceptable the tone, a last woody betwixt the world’s biggest economies is inactive acold from being secured.

As the Israeli-Iran warfare fades from headlines, the commercialized warfare whitethorn soon retake the spotlight, and with it, the accrued inflationary expectations. For Bitcoin and different hard assets, this macro backdrop is mostly bullish. Yet this bull marketplace is missing a important piece.

A bull marketplace without believers?

Bitcoin onchain metrics suggest that the marketplace lacks the wide condemnation usually seen successful bull cycles. According to CryptoQuant, mean Bitcoin inflows to Binance person collapsed to 5,700 BTC per month, little than levels recorded during the 2022 carnivore market. In emblematic bull markets, speech inflows emergence arsenic retail participants pursuit momentum. This time, silence.

The accelerated betterment from past Sunday’s slump, triggered by Israel’s strikes connected Iran, shows determination is inactive plentifulness of wealth acceptable to bargain the dip. However, arsenic the Glassnode report shows, this wealth appears concentrated among blase traders, hedge funds, and organization desks, not the retail crowd. As Bitcoin transaction counts diminution and sizes grow, trading has shifted offchain, with perpetual swaps present dominating the action.

Bitcoin Vector, a Willy Woo and Swissblock project, sums it up bluntly:

“The tide is turning successful favour of the bulls, but onchain spot is the missing piece. Without a betterment successful Fundamentals and cardinal components (Liquidity + Network Growth), the upside remains speculative, driven by leverage, not conviction. Bulls request much than conscionable operation power to prolong this move.”

Bitcoin Price, Finance, Economics, Economy, Inflation, BTC Markets, Trading

This raises a important question. Can a bull marketplace driven chiefly by organization investors—and not retail enthusiasm—sustain itself?

The summertime lull—or the calm earlier the storm?

While speculation is flourishing offchain, semipermanent holders are softly accumulating. Axel Adler Jr. notes that the ratio of semipermanent to short-term holders is erstwhile again rising, arsenic it did earlier erstwhile rallies astir the $28,000 and $60,000 levels. Adler Jr. said,

“Today, astatine the $100K mark, we again spot sustained maturation successful the LTH/STH ratio: this accumulation signifier could past 4-8 weeks, aft which, by analogy with erstwhile cycles, a almighty upward reversal is likely.”

If humanities patterns hold, Bitcoin’s adjacent limb could people the $160,000 range, according to the analyst.

Seasonality supports this timing. Bitcoin historically underperforms successful summer. Data from the past decennary shows that betwixt May 21 and Sept. 25, Bitcoin’s mean annualized instrumentality is conscionable +15%, compared to +138% during the remainder of the year. More recently, summertime has often been outright bearish, with an mean seasonal drawdown of –17.6% since 2017.

This past implies that the coming months whitethorn beryllium little astir fireworks and much astir consolidation—an accumulation signifier wherever proviso softly tightens beneath the surface.

If the economical information continues to deteriorate—especially jobless claims and the Fed’s favored Core PCE ostentation speechmaking expected connected Friday and Saturday—the Fed could so chopped rates successful September and October. That easing would get close arsenic Bitcoin exits its seasonal slump and semipermanent holders accumulate enough.

As Glassnode put it, “Structure remains supportive, but a breakout to caller highs volition apt necessitate a wide pickup successful demand, activity, and conviction.” Whether that condemnation emerges successful clip depends connected 2 things: the Fed and whether Bitcoin tin erstwhile again seizure the public’s imagination.

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.

View source