Analysis: Bitcoin Buying Pressure Returns, Rebound Relies on Macro Improvement, Institutional Demand Rises but Upside Limited

Odaily Planet Daily reports that the buying pressure for Bitcoin is returning, but the current rebound mainly relies on improvements in the macroeconomic environment rather than catalysts from the cryptocurrency market itself. As institutional demand continues to strengthen, weak U.S. employment data has reduced the likelihood of a Federal Reserve rate hike in September. However, corporate treasury sell-offs and persistently high long-term U.S. Treasury yields still limit Bitcoin's upward potential.

The report indicates that due to easing geopolitical tensions, falling oil prices, and a cooling U.S. job market, risk assets have generally rebounded, bringing Bitcoin prices closer to the upper range of $62,000 to $65,000. The spot Bitcoin ETF has recorded net inflows for five consecutive trading days, attracting approximately $865.3 million in funds, corresponding to about 13,300 BTC, while the new supply of Bitcoin on the network during the same period was only about 3,150 BTC.

However, it was noted that last week, Strategy sold 1,638 BTC, and on-chain data shows that approximately 1.79 million BTC have a cost basis concentrated in the $62,000 to $65,000 range, which still creates significant supply pressure above. This is also an important reason why Bitcoin's price response has been relatively mild. At the same time, the inflow trend for Ethereum ETFs continues, indicating that institutional funds are returning to the cryptocurrency market, but investment preferences are becoming more concentrated and cautious.

On the macro front, U.S. non-farm payroll data for July shows a slowdown in job growth, and employment data from previous months has been revised downwards, indicating that the labor market is cooling. Although the unemployment rate has dropped to 4.1%, the main reason is a decline in the labor force participation rate, rather than a significant improvement in the job market. It is believed that low layoff levels and a decrease in initial jobless claims indicate that the U.S. job market is still in a "cooling rather than recession" phase, but slowing wage growth, a declining labor participation rate, and a narrowing recruitment scope all reflect that the momentum in the job market is weakening.

The market has now lowered the expectation of a Federal Reserve rate hike in September to 43.9%, which has driven down short-term U.S. Treasury yields and the dollar, supporting the rise of stocks and cryptocurrency assets. However, long-term U.S. Treasury yields remain high, with the 30-year Treasury yield staying above 5.2%, reflecting investors' ongoing concerns about inflationary pressures and government debt expansion.

It is pointed out that if the Federal Reserve maintains interest rates in September, it is more likely to represent a policy wait-and-see rather than the start of a rate-cutting cycle. The current macro environment still supports Bitcoin, but a sustained breakout above the range requires ETF inflows to consistently exceed market selling pressure, while inflation data needs to further ease to drive down long-term yields. Until these two conditions are met, Bitcoin is likely to remain in a range-bound oscillation.