Bitcoin’s latest rebound may lack the buying support needed for a lasting breakout, according to the latest Bitfinex Alpha report.
Summary
- Bitfinex says Bitcoin’s CPI rally lacks sustained spot buying and relies heavily on macroeconomic repricing.
- Sustained ETF inflows could help Bitcoin secure acceptance above the key $68,000 to $68,300 band.
- Softer inflation data reduced rate-hike fears, but Bitfinex remains cautious about Bitcoin demand durability.
Bitcoin closed at $65,086 on July 14, gaining 4.4% and recording its highest close since June 22. Bitfinex said softer US inflation data drove most of the move by changing expectations around interest rates rather than attracting steady Bitcoin-specific demand.
The report described the rally as “borrowed strength,” citing limited spot buying, a negative Coinbase premium and inconsistent inflows into US spot Bitcoin exchange-traded funds.
Softer inflation data drives Bitcoin higher
The June Consumer Price Index fell 0.4% from the previous month, while annual inflation slowed to 3.5% from 4.2%. Core inflation stood at 2.6%, below market expectations.
The weaker inflation data reduced expectations for another Federal Reserve rate increase. According to Bitfinex, the odds of a July rate hike fell from 42% to around 12.3%, while the two-year US Treasury yield dropped as much as 14 basis points.
Bitcoin moved toward $65,000 as Treasury yields declined and the US dollar weakened after the inflation release.
Bitfinex said Bitcoin had shown little asset-specific demand before the CPI report. The firm pointed to ETF outflows, unchanged corporate holdings at Strategy and a negative Coinbase premium as evidence that macro conditions remained the main driver.
Bitcoin ETF flows remain a major test
US spot Bitcoin ETFs recorded $424.7 million in net outflows on July 13, according to the Bitfinex Alpha report. The outflow erased gains from the previous week, which had marked the first positive week after nine consecutive weeks of withdrawals.
The funds then attracted $181.1 million in net inflows on July 14. BlackRock’s IBIT accounted for $138.9 million of the total.
Bitfinex said future ETF flows will show whether institutional demand can continue beyond the immediate reaction to the CPI report. The firm wants to see steady inflows that continue regardless of short-term price movements.
Strategy also reported no change in its Bitcoin holdings during the latest reporting period. Its holdings remained at 843,775 BTC, while the company raised $466.7 million through an equity offering to support its corporate obligations.
$68,000 to $68,300 becomes Bitcoin’s key test
Bitfinex identified the $68,000 to $68,300 range as Bitcoin’s main decision zone. The short-term holder cost basis stood near $68,073, while the second-quarter opening price sat around $68,266.
The firm said Bitcoin needs sustained ETF demand and stronger spot buying to establish acceptance above this range. A rejection could keep the cryptocurrency within its broader trading range.
Options markets also showed continued caution. Bitfinex said traders were paying higher premiums for put options, which provide downside protection, even as Bitcoin rallied 4.4%.
The report also noted that rising funding rates could add risk if Bitcoin approaches $68,000 without stronger spot demand. Bitfinex said a rise above 15% to 20% in annualized funding near the resistance zone would increase the risk of another pullback.
Macro conditions remain central to the rally
Further inflation data has continued to support risk assets. As reported by crypto.news, softer producer price data also helped Bitcoin trade above $65,000 while reducing expectations for tighter monetary policy.
Bitfinex warned, however, that Bitcoin’s current rally remains closely tied to the interest-rate outlook. The firm said a rise in oil prices or renewed inflation concerns could quickly change market expectations.
The report identified ETF flows, the Coinbase premium and the $68,000 to $68,300 range as the main indicators to watch. Bitfinex remains cautious until Bitcoin shows sustained spot demand that can support prices even when macroeconomic conditions become less favorable.
