In brief
- Bitcoin has climbed back to $120,000 after briefly pulling back to a local bottom $114,000.
- Institutional flows have resumed, with ETF inflows and treasury adoption gaining ground.
- Analysts point to macro headwinds including inflation risk, geopolitical tensions, and the potential for a dollar rebound.
Bitcoin has reclaimed the $120,000 mark following a brief pullback earlier this week as renewed institutional flows continued to be buoyed by clearer U.S. crypto policy.
Its return comes after profit-taking briefly capped the alpha asset’s momentum, stalling a seven-day rally that had pushed it to new highs.
Last week’s rally found a local bottom near $114,000, QCP Capital said in its Wednesday Asia Colour note, adding that Bitcoin has since hovered in a tight range as traders assess whether that would hold or give way to a deeper retracement.
U.S. equities, which have been closely tracking Bitcoin’s rise this year, have stalled since early July, a drift the firm said could signal exhaustion. The S&P 500 has risen by just 0.6% over the past five days, according to Google Finance data.
“Equities have so far shrugged off a cocktail of headwinds, from elevated base tariff levels to fresh threats targeting nations purchasing Russian oil,” QCP wrote.
Still, institutional confidence in Bitcoin appears to be gaining momentum, despite persistent macroeconomic risks.
“The push for regulatory clarity is a major confidence booster for both retail and institutional investors,” James Toledano, chief operating officer at Unity Wallet, told Decrypt.
Toledano is referring to key developments in crypto policy over the past few weeks, centered on the U.S. House’s passage of the GENIUS Act on Thursday.
“While the outcomes are still pending, the signal is clear: U.S. lawmakers are engaging seriously with crypto. And ultimately, clarity invites capital,” Toledano said.
Others see broader liquidity trends supporting the rally.
Bitcoin “continues to grind higher” as fresh liquidity comes in, Vincent Liu, chief investment officer at Kronos Research, told Decrypt.
The rally is “driven by corporate treasury traction, steady stablecoin flows, and a maturing crypto ecosystem,” he added, noting that while this is the case, the current rally is open to risks including “a dollar rebound and stubborn inflation.”
Macro data on the horizon could also challenge the rally’s resilience, Liu noted, pointing to jobless claims set for release on July 24 as a key test.
A stronger-than-expected print, he cautioned, could “revive rate hike fears and pressure crypto.”
Supply and demand
Other observers remain steadfast in their assessment of Bitcoin’s trajectory, citing its fundamentals and institutional demand. Ryan Yoon, senior analyst at Tiger Research, told Decrypt he sees the uptrend continuing despite lingering headwinds.
“While short-term profit-taking will continue amid the recent price surge, supply and demand dynamics are poised to strengthen further,” he said.
Yoon also said corporate adoption of crypto, particularly for Bitcoin as a treasury asset, has continued to gain momentum since the second quarter.
The trend shows firms pivoting their treasury to Bitcoin, Ethereum, Solana, and other crypto assets, even as some face financial struggles.
“This momentum shows no signs of abating,” Yoon observed.
Despite this, Yoon points to “elevated short-term inflation expectations, diminished prospects for interest rate cuts, and the intensifying tensions between Trump and Powell” as negative signals for the market.
While tariffs are a “risk the market has already priced in,” broader factors like war and geopolitical escalations are “always looming,” he said.
“Nevertheless, even if an altcoin season gains speed, Bitcoin’s dominance is unlikely to decline given the accelerating inflow of institutional capital,” he said.
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