Bitcoin’s recovery over the past week owes more to the rates market than to anything happening inside crypto. Since 29 July, investors have materially reduced the probability they assign to further rate hikes this year, and long-duration assets have responded accordingly.
Two developments drove the repricing. US macroeconomic data came in slightly softer, and hopes grew that the conflict with Iran moves closer to resolution. Oil is the mechanism connecting the two. Any easing in geopolitical tension reduces pressure on energy prices and inflation expectations, which in turn lowers the case for further monetary tightening. Renewed escalation reverses that support quickly. Bitcoin is responding to what the conflict implies for inflation and rates, not to the geopolitical headlines themselves.
The labour market points the same way. JOLTS figures indicated weaker labour demand, and the hiring increase anticipated around the World Cup has not materialised to the extent expected. The broader employment picture is starting to look less robust, which helps explain the reduction in rate hike expectations. Friday’s payroll figures are the next meaningful test.
For advisers, the more useful signal sits in market internals. Bitcoin whales sold approximately $40B since October 2025, making them one of the largest sources of supply pressure in the current cycle. That has now turned. Three consecutive weeks of modest whale accumulation suggest the distribution phase is ending, consistent with the pattern observed at similar points in previous four-year cycles.
Flows corroborate the shift in sentiment. Digital asset investment products have attracted $1.05B so far this week, marking a fifth consecutive positive week. That follows an eight-week period in which investors withdrew a record $8B. The reversal is not yet decisive, but it increasingly resembles capitulation followed by early re-accumulation rather than the beginning of a prolonged structural decline.
The conclusion is that the cycle lows are probably now behind us, without implying an immediate return to strong upside. Bitcoin is more likely to remain range-bound over the next two to three months, with scope to trade toward $80,000 while struggling to sustain a move beyond it. A more durable advance toward $100,000 requires a clearer deterioration in employment data and a more meaningful reduction in rate expectations. At present neither looks imminent. The Iran conflict remains highly uncertain, and the Fed has shown little appetite to signal an easing bias. The Jackson Hole symposium later this month provides a clearer indication of the monetary policy outlook, though an especially dovish message is not expected.
Regulatory progress has weakened in parallel. Polymarket now assigns only a 14% probability that the CLARITY Act becomes law this year1. The Senate will not vote on it before the summer recess2, and once lawmakers return, attention shifts rapidly toward the midterm elections.
A delay weighs most heavily on Ethereum, stablecoin-related projects and the broader token market, where statutory clarity matters more than it does for Bitcoin. This is a timing problem rather than a fundamental reversal in US crypto policy. Support for market structure legislation has become increasingly bipartisan, partly because stablecoin issuers represent a growing source of demand for US Treasuries. The main political disagreement concerns ethics, specifically whether elected officials should be able to launch and profit from their own cryptocurrencies. That debate is separable from the broader case for credible digital asset infrastructure. Even if CLARITY slips into next year, the underlying regulatory direction remains constructive.
Past performance is not a reliable indicator of future results. Capital at risk.
Sources
1 Polymarket, as of 06 Aug 2026
2 Coindesk, 07 Aug 2026