Bitcoin’s Range Trade Hinges on Institutional Bet and Macro Moves

Bitcoin, currently consolidating near $118,000, faces a critical juncture as it trades within a defined range of $117,279 to $118,445. Technical indicators suggest a potential breakout, with the RSI at a neutral 53 and bullish-aligned EMAs across multiple timeframes. The market remains in a holding pattern, with support at $117,000 and resistance at $119,000 defining the immediate trajectory. A break below the former could expose the price to $116,500 and beyond, while a retest of the latter may pave the way for a rally toward $121,000–$122,500.

The surge in institutional adoption through spot Bitcoin ETFs continues to be a major driver of demand, with ETF assets under management now exceeding $158 billion. This figure approaches the $198 billion held in gold ETFs and reflects the growing appetite from pension funds, sovereign wealth vehicles, and insurers. ETF inflows have become a structural underpinning for Bitcoin’s price, offering a consistent bid even as retail participation wanes. For context, BlackRock’s spot Bitcoin ETF alone attracted $1.3 billion in two days, underscoring the scale of institutional interest.

Macroeconomic conditions further bolster the bullish narrative. The U.S. Federal Reserve is widely expected to cut interest rates in September, with traders pricing in a 92.5% probability. Global liquidity, already at record levels, continues to expand, with the M2 money supply reaching $55.5 trillion. This influx of capital is feeding into risk assets, including Bitcoin, which has benefited from a soft dollar environment and improved economic outlook. Additionally, the Trump administration’s recent policy initiatives, such as the GENIUS Act and the proposed Strategic Bitcoin Reserve, are reinforcing institutional confidence in Bitcoin as a legitimate asset class.

While Bitcoin remains the dominant player in the crypto market, its market dominance has declined from 65% in May to 57.6% as capital rotates into major altcoins. Ethereum (ETH-USD), for instance, is up 3.14% to $4,556.25 and approaching its 2021 high near $4,800. Solana (SOL-USD), Dogecoin (DOGE-USD), and others are also experiencing strong momentum, with combined altcoin market capitalization surpassing $1.4 trillion. This diversification of demand highlights the maturing ecosystem, where Bitcoin’s role as a store of value is complemented by altcoins offering utility and innovation.

However, the market is not without risks. Volatility remains a persistent feature, as evidenced by a recent $261 million in liquidations triggered by a hotter-than-expected PPI report. Ethereum accounted for the largest share of these losses at $115 million, signaling the fragility of leveraged positions. Excessive leverage and automated liquidations create a scenario where sudden price movements can erode confidence, even in bullish cycles. Additionally, the RSI’s proximity to overbought levels raises the possibility of a short-term pullback before the next phase of upward movement.

Looking ahead, the outlook for Bitcoin remains mixed. A break above $120,400 could set the stage for a rally toward $127,000–$131,000, supported by institutional inflows and favorable macroeconomic conditions. Conversely, a failure to hold above $117,000 may lead to a decline toward $112,000–$115,000. Analysts are divided on the longer-term trajectory, with some, like Steven McClurg, anticipating a range of $140K–$150K by year-end, while others, such as Mike Novogratz, warn that reaching $1 million would reflect economic collapse rather than prosperity. For now, the market is in a holding pattern, with ETF flows, policy developments, and macroeconomic trends shaping the next move.