Bitcoin Is Stuck. Here's What Could Send It Higher
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| By Marija Matic |
Bitcoin (BTC, “B+”) closed last week drifting lower.
It slid to around $62,500 as spot demand thinned out, Strategy (MSTR) stepped back into the “sell” column after five quiet weeks and the derivatives market kept its defensive crouch.
On paper, that reads like a market losing its footing. Today, though, the picture looks subtly different.
And not just from a price perspective. Although BTC has rallied back to the $63,500 level — putting the movements of the past month at breakeven …
There is also a fresh macro catalyst in play. One that has nudged the mood from wary to cautiously constructive … and is slightly rewriting the backdrop against which every risk asset now trades.
And beneath the surface, the on-chain data is telling a story of resilience rather than capitulation.
A Macro Jolt: The U.S. Economy Is Accelerating
The turn in tone owes a lot to a single data point: The U.S. ISM PMI came in at 55.6 against expectations of 54.0, a four-year high.
That is an unambiguously bullish signal for the U.S. economy, corporate earnings and the dollar.
Here’s the simple explanation …
The Purchasing Managers' Index gauges the health of the U.S. manufacturing and services sectors by surveying the supply-chain executives who sit closest to real demand.
A reading comfortably above 50 signals expansion. And a four-year high signals acceleration, not just stabilization.
Simply put, if you travel up to the start of the American supply chain, the people ordering the raw materials and staffing the factory floors are upbeat.
China, notably, went the other way.
Its factories kept growing in July, but more slowly. A private survey (RatingDog) slipped to 50.9 from 51.7 in June, and the government's own survey was even weaker.
Bottom line: the U.S. is speeding up while China's factory engine is losing a little steam.
The Catch: Great News Can Be Awkward News
Here's the wrinkle …
A booming U.S. economy is fundamentally good news for growth. But in the short term, it can throw sand in the gears for risk assets.
That’s because it reshapes the interest-rate outlook:
- Fewer rate cuts. A strong economy hands the Federal Reserve far less reason to ease policy.
- Higher for longer. Rates may stay elevated precisely to keep that strong growth from tipping over into inflation.
Tighter-for-longer conditions are exactly the sort of backdrop that keeps speculative capital cautious.
And yet, the market's initial reaction was favorable. The S&P 500 pressed toward all-time highs, and total crypto market cap jumped nearly 2% before settling into a steadier gain of around 1.4%.
A Quiet Signal from Japan
There's one more macro wrinkle worth watching, and it doesn't come from the Fed.
On Friday, the U.S. and Japan teamed up to prop up a weakening yen, the U.S. Treasury (through the New York Fed) and Japan's finance ministry both stepped in to buy the currency.
It was the first time the two countries have jointly acted to support the yen since 1998. Meaning this was a notable move, not routine housekeeping.
Why should a crypto trader care? Because of something called the yen carry trade.
For years, investors have borrowed cheaply in yen and plowed that money into higher-returning assets around the world. Including risk assets like crypto.
So, when the yen suddenly jumps in value, those borrowed positions get more expensive to hold, and traders rush to unwind them.
That selling can spill over into everything else.
We saw exactly this in August 2024: a fast yen move set off a wave of forced selling that briefly rattled global markets before they steadied.
This week's intervention doesn't guarantee a repeat; the setup is different, and things could stay calm. But it's a reminder that a sharp swing in the yen could be a way turbulence reaches Bitcoin too.
So, the yen and U.S. bond yields are on the list of things worth keeping an eye on.
Interestingly enough, both are macro indicators that cycles expert Juan Villaverde uses alongside his Crypto Timing Model to determine when the crypto market will experience significant shifts.
You can read his latest analysis about the bond market here and what he sees for Japanese liquidity and the yen here.
The Network's Pulse Is Quickening
Away from the macro plumbing, the crypto network's own vital signs are picking up.
According to CryptoQuant data, everyday usage is growing: daily active addresses and total transaction volumes are pushing beyond their normal patterns.
Alongside the uptick in activity, a modest wave of fresh, price-sensitive capital is currently trickling back into the space. Meanwhile, the recent bleed of cash out of the ecosystem is beginning to steady.
The outflows haven't reversed into a flood of inflows, necessarily. but the hemorrhaging has slowed. And that conviction is the real story: Even through choppy prices, long-term investors have simply refused to blink.
According to CryptoQuant, the ratio of supply held by restless short-term traders versus diamond-handed long-term holders is sitting near historic lows.
And crucially, the resilience has kept BTC from slipping below the lower edge of its recent range.
Translated: seasoned investors are tuning out the speculative noise. Rather than surrendering their positions to short-term turbulence, they're sitting tight, and that stubbornness is a big part of what has kept the structural floor intact.
The Bottom Line: A Market in Transition
Put it all together and Bitcoin looks like an asset locked in a genuine tug-of-war. A transition phase where two forces pull in opposite directions.
On one side, the structural floor is being propped up by stubborn long-term holders, quickening on-chain activity, and the (admittedly streaky and sometimes unreliable) institutional demand flowing through the ETFs.
On the other side, any real upside breakout is still being suffocated. Weak spot-buying momentum under valuation pressure and a derivatives market still trading defensively keep overall risk appetite tightly in check.
And there's an added macro overhang now: the bond market and the Japanese carry-trade.
The result is a market that's holding its ground without yet finding an escape velocity.
Yet, Bitcoin price is not a surprise. It’s playing its historical cycles almost by the book.
It’s the familiar, patience-testing work of grinding through an accumulation and bottoming phase before the next chapter can begin.
Savvy investors know this pattern. And they know how to use this sideways grind to their benefit. Before the frenzy of the next bull run kicks in.
Best,
Marija Matić
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