Bitcoin briefly traded down to US$58,000 this week before recovering convincingly. The move points to meaningful resistance at the US$60,000 level, but the strength of the bounce also suggests genuine buyer interest on dips.
Two macro forces dominate the near-term picture. The first is an equity-led risk-off rotation. The Morningstar AI Index has fallen 6.1% over the past two days, dragging broader technology sentiment lower and pushing investors toward safe havens, the dollar in particular. The cross-asset moves carry a classic risk-off signature, with the Australian, New Zealand and Canadian dollars all selling off while the yen held firm. The second force is rates. Core PCE was released in line with expectations at 3.4% in May, but the accompanying consumer spending data came in above expectation, another reason for the Fed to retain its hawkish stance. Rate expectations have already shifted following Kevin Warsh’s first meeting as Chair, and that tighter-for-longer backdrop continues to act as a headwind.
Single-name fragility is adding to the caution. STRC, the yielding component of Strategy, has dropped to 75 from par at 100, with SATA (Strive) down to 88. Some of this reflects cannibalisation between the instruments, but the market is reading it as a signal of broader fragility. Strategy’s Bitcoin holding, at around 4% of total supply, is not a systemic risk, yet it is weighing on sentiment. Global digital-asset ETP issuers recorded US$1.4B in net outflows this week so far. Ethereum faces its own crosscurrents. The Ethereum Foundation has cut 54 staff, around 20% of its workforce, as part of a reorganisation into five domain clusters. The emergence of Ethlabs as a new power centre in core development reduces the Foundation’s monopoly over funding and senior protocol talent, which is probably healthy if it adds execution capacity, though it raises governance questions.
One signal is more constructive. Whale selling, the key trigger for the October selloff, has cooled dramatically. Working from the four-year Bitcoin cycle, CoinShares estimated that selling would taper 6 to 9 months after it began, and that is playing out roughly on cue. The caveat is that whales historically do not re-enter as buyers until the next halving, which is not due until 2028, so price support from this cohort remains some way off.
The near-term outlook is for subdued conditions, with inflation the key variable. Higher oil prices feeding through from the Iran situation are likely to keep CPI elevated for at least the next couple of months, sustaining the Fed’s hawkish stance. A genuine turnaround in sentiment would probably require a meaningful deterioration in employment data, and there is no sign of that yet.
The other overhang is the CLARITY Act, which passed the House in July 2025 and cleared the Senate Banking Committee on 14 May 2026 in a bipartisan 15 to 9 vote. A full Senate floor vote and reconciliation with the House version still remain, pointing to an August window at the earliest.
For advisors, the message is one of patience. The macro backdrop remains challenging, but cooling whale activity and steady accumulation on dips suggest the market is finding a floor rather than breaking down.