What’s Driving BTC Price Recovery And Rising Inflation Impact

Bitcoin (BTC USD) price achieved a significant recovery in the last 2 weeks after previously being heavily discounted largely due to political-economic factors.

This recovery has raised hopes that BTC could rally back above $100,000 and push even higher.

While the possibility that Bitcoin could extend its recovery remains significant, analysts have also been keeping a close eye on economic data.

Particularly inflation data which may offer insights into liquidity flows across risk-on asset classes.

The latest inflation data suggests that Bitcoin investors may have some rough times in the near term.

This is because consumer inflation expectations were on the rise recently to 6.7%. A noteworthy figure that has been rising consecutively for the last 4 months.

Higher inflation expectations may not be favorable for Bitcoin’s recovery because it means the FED may raise rates.

A contrary outcome to expectations of lower rates which would offer more investor confidence.

If interest rates go higher, then BTC price may struggle to secure the liquidity it needs to fuel the bulls.

The potential list of outcomes could include a slower recovery, or perhaps even more downside.

Another Major Bitcoin ETF Might be About to Enter the Market

While things looked a bit bleak as far as interest rates were concerned, there was some positive Bitcoin news from the ETFs segment.

Financial services company Charles Schwab is reportedly planning to introduce crypto spot ETFs in the coming months.

The $138 billion firm, which has historically dabbled in the traditional finance industry, represents growing institutional interest in cryptocurrencies.

However, this possibility may not necessarily contribute to demand in the near-term since the official timeline of ETF launches was not confirmed.

In addition, existing Bitcoin ETFs still demonstrated relatively weak institutional demand.

This was in line with the prevailing market sentiment which was still in fear territory at the time of observation.

A clear sign that investors were still not convinced that market conditions had improved enough for more liquidity injection.

The impact was clear especially in Bitcoin’s price action. It moved sideways in the last 7 days indicating that the previously observed demand had cooled off.

Whale activity even switched back to negative netflows since 14 April, which meant that whales were taking short term profits.

A popular move when the market sentiment remains in fear or extreme fear territory.

Bitcoin (BTC USD) Transaction Activity Cools Down But How Has it Influenced Accumulation

Still on the topic of recent changes, transaction count recently pivoted to the downside on Thursday, indicating that transactions were declining.

This was after previously surging along with the price pivot from lows achieved earlier this month.

In simpler terms, the previously observed bullish momentum cooled down as the weekend approached.

While that outcome confirmed a pause on demand, BTC demonstrated resilience against the downside during the weekend. This was despite some profit-taking from the whale cohort.

Bitcoin had a $85,158 press time price tag, with price action restricted within a narrow range ($83,000 and $86,500).

This range prevailed for the last 7 days and it underscores a major question. Will Bitcoin regain momentum to the upside, or capitulate in favor of the bears?

The narrow range meant that Bitcoin’s next move could be highly sensitive to market outcomes.

The ranging weekly performance does signal that sell pressure was not strong enough to push for a sizable bearish pivot.

Analysts have been waiting to see whether capitulation will occur especially as a new week rolls over.

The resilience against the downside, coupled with positive Bitcoin ETF flows on Friday, may have acted as a confidence booster against sell pressure.

The short to medium-term Bitcoin outlook could be heavily influenced by inflation, interest rate outcomes, and the subsequent impact on liquidity flows in the markets.