After rising 1.56% over the previous day, Bitcoin [BTC] was trading at $63,921.09 at the time of writing, indicating that it is beginning to recover.
However, according to a recent CoinShares report, the recovery of Bitcoin has been fueled more by shifts in the overall economy than by developments unique to the cryptocurrency space.
Sentiment has turned, and macro is the reason why
In H1 2026, concerns about inflation, high-interest rates, geopolitical tensions, and slowing economic growth had caused investors to withdraw about $8 billion from cryptocurrency investment products over the last eight weeks, the longest and largest outflow on record.
180-degree sentiment in sentiment
However, that trend has begun to reverse, and it appears that inflows will likely continue for two weeks in a row.
Interestingly, it was not any Bitcoin-specific metric that caused the sentiment shift but a reaction to lower-than-expected U.S. inflation data, which led investors to believe that the U.S. Federal Reserve might ease monetary policy.
For context, a modest Bitcoin rally and inflows of about $250 million were triggered on the 14th of July when the Consumer Price Index (CPI) reported -0.4%, below the expected -0.2%.
Expectations of easing monetary policy were further reinforced the next day when the Producer Price Index (PPI) abruptly fell -0.3% against forecasts of 0.0%.
Markets began to anticipate fewer rate hikes or even rate cuts as a result of less pressure from the Federal Reserve to maintain high-interest rates due to lower inflation.
This resulted in hundreds of millions of dollars being invested in Bitcoin investment products as a result of this increased risk appetite.
What lies ahead for Bitcoin?
Additionally, the report shed light on the fact that Bitcoin has probably reached its short-term bottom, but without a significant change in Federal Reserve policy, a robust bull run is unlikely.
A slightly weaker economy could provide a further boost to bitcoin as we see a rerating in interest rate expectations.
In fact, instead of exhibiting a sustained rally, Bitcoin is anticipated to trade within a relatively narrow range until there are unambiguous indications of monetary easing. The range projected was $120,000 and $60,000.
We expect range trading, with a break above US$80,000 unlikely absent a meaningful shift in monetary policy expectations.
AMBCrypto’s recent article also noted that Bitcoin is predicted to continue its downward trajectory and drop to $55,560 and $51,934 in the upcoming weeks.
Additionally, the report demonstrates that investor sentiment is still cautious. In fact, a growing number of people are becoming interested in blockchain-related stocks.
This was further confirmed by the Crypto Fear and Greed Index, which was in the “extreme fear” zone.
Final Summary
- Macroeconomic factors are shaping bitcoin more than just crypto-specific metrics.
- Investors are still cautious of Bitcoin and are more keen on blockchain-related stocks.