Still No Demand Regime Change for BitcoinAlso Gold ETF Flows Are Catching Up to Bitcoin & Inflation Data Is Not Conducive to Rate Cuts
Welcome to Ecoinometrics’ Friday edition. Each week, we analyze the three most critical market signals impacting Bitcoin and macro assets, delivering institutional-grade insights through data-driven charts and analysis. Today we’ll cover:
Taken together, these three charts point to the same conclusion from different angles. Bitcoin’s price action isn’t being held back by a single shock or headline risk. It’s being constrained by a broader setup where fresh demand remains fragile, capital continues to favour defensive assets during uncertainty, and monetary policy lacks the room to turn meaningfully supportive. That combination doesn’t rule out recovery. But it does mean that upside remains conditional, easily interrupted, and highly sensitive to confirmation rather than narrative. In this environment, what matters most is not isolated signals, but whether they can reinforce each other over time. In case you missed it, here are the other topics we covered this week:
Get these professional-grade insights delivered to your inbox: Still No Demand Regime Change for BitcoinLast week, Bitcoin briefly crossed an important threshold: rolling 30-day ETF flows turned positive. That matters because sustained ETF inflows are a precondition for any durable price recovery. Without new capital consistently entering through ETFs, upside moves tend to stall rather than compound. We also flagged at the time that this was only an early signal, not confirmation. This week made that distinction clear. Renewed geopolitical tensions spilled into broader markets, triggering another bout of risk-off behaviour… again. Since the start of the Trump administration last year, this pattern has repeated itself again and again: periods of calm interrupted by tariff threats, policy headlines, and sudden volatility. Most risk assets managed to recover from the latest shock. Bitcoin didn’t. The reason is simple. Bitcoin isn’t just dealing with macro uncertainty, it’s also coming off a deep and prolonged drawdown in capital flows. As the chart shows, cumulative Bitcoin ETF flows have now been in drawdown for more than 100 consecutive days. That’s an unusually long stretch of sustained net demand weakness. When demand is this fragile, even modest spikes in volatility are enough to interrupt recovery attempts, which is exactly what happened this week, as the nascent inflow streak broke once again and rolling flows are negative once more. The result is a market that remains unresolved. A recovery is still possible, but it is not yet self-reinforcing. Until ETF inflows can persist through periods of broader market stress, Bitcoin remains in an undecided demand regime rather than a confirmed recovery phase.
Gold ETF Flows Are Catching Up to BitcoinEarlier this week, we looked at how correlation dynamics across macro assets influence Bitcoin’s behaviour. One of the key conclusions was that, in the current environment, gold has been quietly benefiting at Bitcoin’s expense. When you zoom out, that shift becomes very clear. The chart below compares cumulative net flows into Bitcoin ETFs and gold ETFs since the launch of spot Bitcoin ETFs in early 2024. Bitcoin initially dominated, attracting significantly more capital than gold. But that gap has narrowed sharply over the past few months. Since November, Bitcoin ETF flows have stalled. Gold ETF flows haven’t. As a result, gold is now only about $6 billion behind Bitcoin’s roughly $58 billion in cumulative net inflows over the same period. And the gap continues to close. This isn’t happening because gold and Bitcoin are telling different long-term stories. In fact, they share many of the same structural narratives around hard assets and protection against monetary debasement. The difference shows up in the short term. Repeated risk-off episodes (many tied to U.S. tariff threats and policy uncertainty since 2025) have consistently favoured gold. During those moments, gold tends to attract fresh inflows, while Bitcoin behaves more like a risk asset and struggles to retain momentum. In other words, even when both assets rise over long horizons, their demand dynamics diverge when uncertainty spikes. And over the past year, those spikes have been frequent enough to steadily tilt relative flows toward gold.
Inflation Data Is Not Conducive to Rate CutsMarkets broadly expect the upcoming FOMC meeting to result in no change to the policy rate. Part of that expectation is political. Fed Chair Jerome Powell has been explicit that monetary policy will remain data-driven, and cutting rates while facing overt political pressure would require a clear justification in the numbers. That justification isn’t there. The labor market hasn’t broken, despite repeated fears over the second half of 2025. And inflation continues to pose essentially the same challenge it did two years ago. The chart below shows year-on-year PCE inflation, which I remind you is the Fed’s preferred gauge of inflation. Even smoothing out short-term noise and data delays related to the government shutdown, the message is straightforward: inflation has been stuck at elevated levels for roughly two years. More importantly, it remains well above its pre-COVID range. That matters because the COVID shock is no longer recent history. We are now nearly six years removed from the 2020 crisis. Year after year of inflation running above target compounds, both economically and politically, and it limits how much flexibility the Federal Reserve has. Absent a clear downside surprise in inflation or a sudden deterioration in growth, this makes a fast or aggressive rate-cutting cycle unlikely. Cuts may still come eventually, but they are likely to be cautious and conditional rather than front-loaded. This isn’t a new message from the Fed, and it probably won’t rattle markets on its own. But it does act as a brake on how quickly risk-on assets can expand, even if it lacks the shock value of tariff headlines or geopolitical flare-ups.
Tactical TakeawayThe current setup argues for restraint rather than anticipation. Bitcoin is not facing an outright hostile environment, but it is still operating without durable demand confirmation and without meaningful macro tailwinds. In this kind of market, early signals tend to appear and disappear, and short-lived recoveries are easily interrupted by volatility or shifts in risk appetite. For investors, the key mistake to avoid is treating stabilization as validation. Until ETF inflows persist through market stress increasing exposure aggressively risks chasing moves that lack reinforcement. The discipline here is simple: let confirmation set the pace, not conviction. Incremental positioning can make sense, but only if demand and macro signals begin to align rather than diverge. That’s it for today. Thanks for reading. Cheers, Nick P.S. Every week, our team conducts extensive research analyzing market data, tracking emerging trends, and creating professional-grade charts and analysis. Our mission: Deliver actionable macro and Bitcoin insights that help institutional investors and financial advisors make better-informed decisions. Ready for institutional-grade research that puts you ahead of the market? Click below to access our premium insights. Invite your friends and earn rewardsIf you enjoy Ecoinometrics, share it with your friends and earn rewards when they subscribe.
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Friday, January 23, 2026
Still No Demand Regime Change for Bitcoin
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