Bitcoin is experiencing a notable upswing this morning, spurred by a lower-than-expected Consumer Price Index (CPI) report and growing optimism surrounding the amended Digital Asset Market Clarity Act. Early indicators show modest inflows into Bitcoin Exchange Traded Funds (ETFs), tallying up to $116.7 million, as reported by SoSoValue.
Timothy Misir, the head of research at Blockhead Research Network, shared insights on the current state of Bitcoin as on-chain metrics indicate that it is moving beyond a phase of significant stress. Misir noted that Bitcoin’s price has risen above the Active Investors Mean of $87.7K but is still trailing the Short-Term Holder cost basis of $98.9K. This situation reflects a diminished urgency for forced selling, though it underscores the substantial overhead supply that needs to be consumed for a more stable breakout.
However, Bitcoin’s future could be challenged by the ongoing scrutiny surrounding Federal Reserve Chair Jerome Powell. Farzam Ehsani, CEO of VALR, described the situation as “paradoxical.” Traditionally, diminishing confidence in U.S. dollar policy has driven interest in decentralized assets, positioning them as hedges against political and currency instability. Yet, recent political maneuvers are amplifying uncertainty, prompting short-term outflows from risky and high-volatility markets. Ehsani advised investors to proceed with “extreme caution” in the upcoming weeks, as the crypto market could face sharp reactions depending on the developments surrounding the Fed’s policies.
Ehsani articulated that should the Fed maintain its current stance, the market might revert to its fundamental parameters. Conversely, if the White House succeeds in implementing a rate cut along with stimulus measures, both Bitcoin and gold could see significant gains.
Analysts from Benchmark expressed optimism, stating that this week could signify a pivotal turning point in crypto’s ongoing regulatory uncertainty. They highlighted the imminent Senate committee vote on the amended Digital Asset Market Clarity Act scheduled for Thursday. The analysts believe that a favorable outcome from the committee could represent a significant step toward de-risking the crypto markets, emphasizing that regulatory clarity is crucial for institutional adoption of both crypto tokens and related equities. They anticipate that such clarity would enhance liquidity significantly, which is essential for establishing sustainable crypto valuations.
Despite these encouraging prospects, not everyone shares this optimistic view. Nic Puckrin, co-founder of Coin Bureau, expressed skepticism about the bill’s progress, stating he is “not holding his breath” for its passage this month. He warned that further delays could arise as committee members confront the ramifications of the proposed amendments, which could exert additional pressure on a digital asset market that has struggled with momentum for months.
