Bitcoin Consolidates After 50% Rally, US Economy Sends Mixed Signals

Bitcoin has been trading within a defined range of $100,000 to $110,000, showing signs of consolidation after a significant rally of nearly 50 percent from its April low of $74,634. This consolidation phase is marked by a decrease in both on-chain and derivatives activity, including reduced spot volumes, lower taker buy pressure, and a decline in open interest. These indicators suggest that the market is transitioning from an aggressive phase to a more stable ranging phase.

Bitcoin’s short-term holder realized price around $98,700 has been a crucial structural level, acting as both support and resistance. During recent volatility, particularly when tensions between Iran and Israel escalated, this level has held firm, with dip buyers accumulating Bitcoin. A brief breakdown last week to a low of $99,830 triggered significant liquidations on both the long and short sides, with futures open interest levels dropping over 7 percent in a 24-hour window. This liquidation event has helped clear excess leverage and reset market positioning ahead of the quarterly close.

Historical data suggests that the third quarter (Q3) is typically a period of lower volatility and muted directional movement for Bitcoin. On average, Q3 has been Bitcoin’s weakest quarter, with returns historically around +6 percent. Price action tends to remain range-bound during this period, which aligns with the current market dynamics.

The US economy is sending mixed signals, with consumer spending slowing while inflation remains above target levels. In May, personal income and spending both decreased, with households drawing on savings and cutting back on essentials. Core inflation climbed to 2.7 percent, making rate cuts less likely as the Federal Reserve focuses on balancing price stability with the risk of weaker economic growth. Trade deficits have widened, jobless claims indicate a cooling labor market, and durable goods orders received a temporary boost from increased aircraft sales. Policymakers are awaiting clearer evidence on the economy’s direction amid tariff pressures and global uncertainty, which has dampened hopes for near-term Federal Reserve action.

In the cryptocurrency sector, efforts to integrate traditional finance with blockchain technology are advancing. Gemini and GF Securities are separately developing tokenized asset offerings, providing EU and Hong Kong investors with new access to US stocks and digital securities. However, the sector’s risks were highlighted by the sentencing of a Pennsylvania man to over eight years in prison for defrauding investors in a $40 million crypto Ponzi scheme, underscoring the need for vigilance as digital finance evolves.