Bitfinex Report: Bitcoin Rebound Relies on Macro Improvements, Institutional Demand Returns but Upside Limited

Odaily News - Bitfinex's latest report points out that Bitcoin (BTC) buying pressure is returning, but the current rebound still relies mainly on improvements in the macroeconomic environment rather than catalysts within the crypto market itself. While institutional demand continues to strengthen, weaker U.S. employment data has lowered the likelihood of a Fed rate hike in September, but corporate treasury selling and persistently high long-term U.S. Treasury yields still limit Bitcoin's upside.

The report shows that driven by easing geopolitical tensions, falling oil prices, and a cooling U.S. labor market, risk assets have rebounded broadly, with Bitcoin price approaching the upper range of $62,000 to $65,000. Spot Bitcoin ETFs have recorded net inflows for five consecutive trading days, attracting approximately $865.3 million in total inflows, corresponding to the absorption of approximately 13,300 BTC, while the newly added supply on the Bitcoin network during the same period was only about 3,150 BTC.

However, Bitfinex stated that last week Strategy sold 1,638 BTC, and on-chain data shows that approximately 1.79 million BTC held at a cost basis concentrated in the $62,000 to $65,000 range, still forming significant overhead supply pressure, which is an important reason why Bitcoin's price reaction has been relatively muted. Meanwhile, Ethereum ETF inflows continue their trend, indicating that institutional capital is returning to the crypto market, but with more concentrated and cautious investment preferences.

On the macro front, U.S. July non-farm payroll data showed slowing employment growth, and previous months' data were revised downward, indicating a cooling labor market. Although the unemployment rate fell to 4.1%, this was mainly due to a decline in the labor force participation rate rather than a clear improvement in the job market. Bitfinex believes that low layoff levels and declining initial jobless claims suggest the U.S. labor market is still in a "cooling rather than recession" phase, but slowing wage growth, declining labor force participation, and a narrowing scope of hiring all reflect weakening labor market momentum.

The market has now lowered its expectations for a Fed rate hike in September to 43.9%, pushing short-term Treasury yields and the U.S. dollar lower, while supporting stocks and crypto assets. However, long-term Treasury yields remain elevated, with the 30-year yield holding above 5.2%, reflecting investor concerns about inflationary pressures and government debt expansion.

Bitfinex noted that if the Fed keeps rates unchanged in September, it is more likely to represent a wait-and-see policy stance rather than the start of a rate-cutting cycle. The current macro environment continues to provide support for Bitcoin, but sustained upside breakout from the range requires ETF inflows to consistently exceed market selling pressure, while inflation data needs to ease further to drive long-term yields lower. Until both conditions emerge, Bitcoin will likely continue to trade in a range-bound pattern.