Bitcoin buying is returning, but the latest rebound still depends more on improving macro conditions than on a fresh catalyst from within crypto, according to a new Bitfinex report cited by Odaily.
Bitfinex said institutional demand has continued to build, while weaker U.S. employment data has reduced the probability of a Federal Reserve rate hike in September. Even so, corporate treasury selling and elevated long-term Treasury yields are still limiting Bitcoin’s upside.
ETF inflows outpace new supply
The report said easing geopolitical tensions, falling oil prices and a cooling U.S. labor market have supported a broader rebound in risk assets, with Bitcoin moving toward the upper end of the $62,000 to $65,000 range.
Spot Bitcoin ETFs recorded net inflows for five straight trading days, bringing in about $865.3 million in total. That equates to roughly 13,300 BTC absorbed, versus only around 3,150 BTC of new Bitcoin supply added by the network over the same period.
Overhead supply is still weighing on price action
Bitfinex said the market is still facing meaningful supply overhead. It pointed to Strategy’s sale of 1,638 BTC last week, along with on-chain data showing that about 1.79 million BTC have a cost basis concentrated in the $62,000 to $65,000 range.
That, the report said, is an important reason Bitcoin’s price reaction has remained relatively muted.
At the same time, inflows into Ethereum ETFs have continued. Bitfinex said this suggests institutional capital is returning to the crypto market, although investor preference is now more focused and more cautious.
Cooling labor data lowers September hike expectations
On the macro side, U.S. nonfarm payrolls data for July showed slower job growth, and employment figures for previous months were revised lower, signaling that the labor market is cooling. Although the unemployment rate fell to 4.1%, Bitfinex said that was mainly due to a decline in labor force participation rather than a clear improvement in employment conditions.
The firm added that low layoff levels and a decline in initial jobless claims indicate the U.S. labor market remains in a “cooling, not recession” phase. Still, slower wage growth, weaker labor participation and narrower hiring activity all point to fading momentum.
Markets have now lowered expectations for a September Fed rate hike to 43.9%, helping push down short-dated Treasury yields and the U.S. dollar while supporting stocks and crypto assets.
Long-term yields remain a cap on further upside
Bitfinex said long-dated Treasury yields are still high. The 30-year U.S. Treasury yield remains above 5.2%, reflecting continued investor concern over inflation pressure and expanding government debt.
The report also said that if the Fed leaves rates unchanged in September, that would more likely signal a wait-and-see stance rather than the start of a rate-cutting cycle.
For Bitcoin to break higher in a sustained way, Bitfinex said ETF inflows would need to keep exceeding market selling pressure, while inflation data would also need to ease further and pull long-term yields lower. Before those two conditions are met, the report said Bitcoin will most likely remain range-bound.