Bitcoin Rally Slows as Spot Volume Declines 19% Probability of Rate Cut

Bitcoin’s recent rally has shown signs of slowing down as spot volume declines, indicating a potential local top due to heightened profit-taking. This shift in momentum suggests that the cryptocurrency market is entering a phase of consolidation, where price movements stabilize before the next significant trend emerges. Analysts from Bitfinex highlight that the cooling of spot volume and weakening taker buy pressure indicate a move from aggressive accumulation to cautious profit-taking, particularly among short-term holders who benefited from the rally from sub-$80,000 levels.

Institutional interest in Bitcoin remains strong, with spot Bitcoin ETFs recording significant inflows. Data from Farside shows a net inflow of $4.63 billion since early June, underscoring sustained confidence in Bitcoin as an asset class. Economist Timothy Peterson describes these inflows as “massive,” projecting a high probability of continued positive momentum. This institutional demand serves as a counterbalance to the short-term profit-taking seen in spot markets, reinforcing Bitcoin’s underlying strength despite current volatility.

The upcoming Federal Reserve interest rate decision on July 30 is expected to significantly influence Bitcoin’s trajectory. Historically, lower interest rates tend to support risk assets, including cryptocurrencies, by reducing the opportunity cost of holding non-yielding assets like Bitcoin. Although the market currently assigns only a 19% probability to a rate cut at this meeting, any dovish signals could trigger renewed buying interest. Analysts caution that while short-term uncertainty persists, the broader market structure remains intact, with higher time frame support levels providing a foundation for potential upside.

Despite recent price gains, Bitcoin’s advance has been tempered by selling pressure from long-term holders, often referred to as Bitcoin OGs. Charles Edwards, founder of Capriole Investments, notes that these holders have been offloading positions since the introduction of spot Bitcoin ETFs in early 2024, which has constrained price appreciation. This dynamic underscores the importance of long-term holder sentiment in determining Bitcoin’s ability to break through key resistance levels. Economist Donald Dean remains optimistic, suggesting that Bitcoin is consolidating at a critical volume shelf and is poised for further upward movement once selling pressure abates.

Bitcoin’s recent price action reflects a complex interplay between waning short-term momentum and robust institutional demand via spot ETFs. While declining spot volume and intensified profit-taking signal a possible local top, macroeconomic factors and long-term holder behavior will be decisive in shaping the next phase of the uptrend. Investors should monitor ETF inflows and Federal Reserve policy closely, as these elements will likely influence Bitcoin’s ability to sustain gains and navigate the current consolidation period.