Bitcoin’s Demand Downtrend Hasn’t ChangedAlso Strategy’s Sales Aren’t The Problem & The Fed’s Tone Has Turned More Hawkish
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:
Bitcoin has remained surprisingly resilient this week despite several developments that could shape the market over the months ahead. The challenge for investors is understanding which of those developments are likely to have lasting consequences and which are simply part of the market’s day-to-day noise. In case you missed it, here are the other topics we covered this week:
Get these professional-grade insights delivered to your inbox: Bitcoin’s Demand Downtrend Hasn’t ChangedBitcoin is trading around $64,000 as I write this report. That’s a surprisingly resilient price given that capital is still leaving the Bitcoin ETF market overall. We highlighted this divergence in Monday’s report. A few days of ETF inflows naturally raised hopes that demand was beginning to recover, but the broader picture tells a different story. But three consecutive days of inflows barely register when compared with the steady outflows accumulated over recent weeks. In fact, the last two trading sessions have already swung back into negative territory. At this stage, the demand regime still looks firmly unchanged. For us, the important signal isn’t whether ETF flows turn positive for a day or two. It’s whether they remain positive long enough to reverse the broader trend in cumulative holdings. We simply aren’t seeing that yet, it is too early. We need demand to recover in a sustained way, right now we think Bitcoin’s recent price stabilization is running ahead of the underlying flow data.
Strategy’s Sales Aren’t The ProblemStrategy’s decision to sell Bitcoin caught plenty of attention this week. But the size of the sale isn’t what matters most. The company sold roughly 3,600 BTC from a treasury of about 845,000 BTC. As the chart shows, that’s less than half a percent of its holdings. On its own, a sale of that size is unlikely to have any meaningful impact on the market. Our analysis on Wednesday reached the same conclusion. The more important development is that Strategy is no longer a buyer under every set of market conditions. The company now has an explicit policy of maintaining cash reserves, which means occasional Bitcoin sales have become part of its playbook. That doesn’t change the long-term investment thesis for Strategy. It does change one assumption many Bitcoin investors had been making: one of the market’s most reliable buyers is no longer guaranteed to keep absorbing supply regardless of conditions. With ETF demand still weak, that makes the current demand backdrop slightly more fragile.
The Fed’s Tone Has Turned More HawkishThe Federal Reserve left interest rates unchanged at its June meeting, so there were no surprises there. The bigger question was whether the meeting minutes would confirm the hawkish shift we had already seen in the dot plot. To answer that, we analyzed the minutes using our Fed Communication Index, which measures how hawkish or dovish the Committee’s language has been over time. The latest reading stands out as one of the sharpest increases in hawkish sentiment since the current tightening cycle began. The minutes help explain why. Committee members repeatedly highlighted persistent inflation risks from energy prices, tariffs and strong AI-driven investment, while expressing greater confidence that the labour market can withstand tighter policy. Several participants even questioned whether current policy should still be considered restrictive. The minutes suggest the Fed has become more comfortable keeping policy tight for longer and, if inflation refuses to ease, even tightening further. That’s a macro backdrop that is unlikely to support stronger demand for Bitcoin over the coming months.
Tactical TakeawayThis week’s headlines don’t materially change our view of the market. ETF outflows continue to dominate over the longer trend, Strategy is no longer a guaranteed source of incremental buying, and the Federal Reserve has become more hawkish. Taken together, those remain headwinds for Bitcoin. Our bias remains to wait for stronger confirmation before becoming more constructive on Bitcoin. Bitcoin’s price has been resilient, but we’d rather see the demand trend improve than assume the market has already turned. The main thing that would make us revisit this view is a sustained reversal in ETF flows. Until then, we think patience remains the more disciplined approach. 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. You're currently a free subscriber to Ecoinometrics. For the full experience, upgrade your subscription.
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