$BTC (+0,17 %) is stuck in a summer lull, with unusually low trading volumes making short-term price movements harder to interpret. Daily #bitcoinvolumes currently stand at around $4 billion, with similarly subdued activity in stocks and other risk assets. In this environment, relatively small capital flows can have a disproportionate impact on prices—we advise caution when interpreting daily volatility.

The macroeconomic environment has nevertheless improved. Recent U.S. labor market data were notably weak, with significant downward revisions; the economy added an average of only about 20,000 jobs per month over the past three months. The expected employment boost from the World Cup turned out to be significantly weaker than anticipated. At the same time, the latest inflation reading was largely in line with expectations and is steadily moving closer to the Federal Reserve’s target.

(Author: James Butterfill, CoinShares’ Head of Research)

You can invest in Bitcoin through the following vehicle: $BITC (-1,13 %)

The ISM Manufacturing Index (Institute for Supply Management Index), a key indicator of U.S. manufacturing activity, continued to strengthen in July, driven by robust investment in AI infrastructure. This upward trend is likely to continue in the coming months, given the very strong export data from Taiwan. The index is now firmly in expansionary territory and has remained above the 52 mark for several months. Historically, any sustained movement above this threshold following a contraction has been associated with strong $BTC (+0,17 %)price gains—the current divergence is therefore unusual. Our analysis of the #bitcoinvariance suggests that the price continues to be driven primarily by the dominant macroeconomic factor, which is closely linked to global growth. If this relationship remains intact, $BTC (+0,17 %) ultimately benefit from the ongoing improvement in manufacturing activity. Currently, however, $BTC (+0,17 %) , however, from a lack of investor interest. This partly reflects the market shift toward AI, although this increasingly overcrowded trend is showing the first signs of fatigue. Meanwhile, sentiment toward cryptocurrencies remains subdued, with many valuation metrics still hovering in a range typically associated with the later stages of a bear market.

At the same time, several indicators have begun to improve. ETF inflows have turned positive again, and funding rates on perpetual futures returned in July. The main catalyst remains a more significant improvement in the inflation outlook. Significant progress in this area would likely give the market a strong boost. Overall, the signs increasingly suggest that we are approaching the final phase of the bear market, although it is unlikely to be over yet.

You can invest in Bitcoin through the following vehicle: $BITC (-1,13 %)

I am deliberately not committing to a precise price target for $BTC (+0,17 %) . The range of possible outcomes is currently too wide for that. Nevertheless, I have a clear view of the direction: In my base-case scenario, #bitcoin be higher at year-end than it is today—that is, above the current level of around $64,000. The lows from March through June may already have marked the bottom of this cycle.

For me, what matters less is the exact magnitude of a potential rise than the risk-reward ratio. It would take an additional negative trigger for significant new losses to occur. For prices to rise, on the other hand, it might be enough for current conditions to remain stable. Four factors support this view: a historically favorable valuation, adjusted positioning following the decline, a return to positive ETF inflows, and the prospect of less hawkish U.S. monetary policy. U.S. spot ETFs recently recorded inflows again after eight consecutive weeks of outflows. Should the Fed refrain from further rate hikes, $BTC (+0,17 %) benefit as an interest-rate-sensitive asset. This is because lower real interest rates typically increase the appeal of scarce, growth-oriented investments such as $BTC (+0,17 %).

(Author: James Butterfill, CoinShares’ Head of Research)

You can invest in Bitcoin through the following vehicle: $BITC (-1,13 %)