Key Summary:
Bitcoin is consolidating within a descending channel, but on-chain activity is weak, indicating a lack of momentum.
Core inflation data has risen (2.7%) and price stickiness has increased, reducing the likelihood of a Federal Reserve rate cut, putting pressure on Bitcoin and risk assets.
Bitcoin experienced significant price volatility at the beginning of the week, with sharp fluctuations over the weekend and Monday leading to a substantial clearing in the derivatives market.
According to Glassnode data, $28.6 million in long positions were liquidated within 24 hours, while $25.2 million in short positions were liquidated. This rare dual liquidation caught leveraged traders off guard, highlighting a sharp shift in market sentiment.
Open interest in Bitcoin has decreased by about 7%, from 360,000 BTC to 334,000 BTC. This decline indicates a temporary clearing of speculative leverage, with the market in a reset phase.
Although Bitcoin continues to fluctuate within the $100,000–$110,000 range, on-chain activity for BTC is cooling. Profitability indicators are weakening, and user participation is low, indicating a consolidation phase. Glassnode notes that the market seems to be digesting recent gains and may be waiting for a new wave of demand to drive the next rally.
From a technical perspective, Bitcoin has failed to sweep external liquidity near the $109,000 mark, leading to a slow decline in the 4-hour chart. The current price movement remains constrained within the descending channel, with key focus on the range between $103,400 and $104,600.
This area aligns with the daily fair value gap (FVG) and is supported by the 200-day exponential moving average (EMA), increasing the likelihood of a rebound.
Considering Bitcoin's absorption of internal liquidity within this range, a breakout above the upper boundary of the descending channel could lead to new highs. However, without accumulated momentum and a recovery in on-chain activity, the overall market structure is likely to remain in consolidation.
The lack of sustained bullish momentum suggests that bearish pressure may continue into next week. Despite recent market optimism regarding rate cuts, the latest inflation data shows that the Federal Reserve has little reason to change its stance.
Personal Consumption Expenditures (PCE) inflation—the Fed's preferred indicator—rose to 2.3%, in line with expectations, while core PCE increased to 2.7%, slightly above the expected 2.6%. This marks the first rebound since February 2025, indicating renewed inflationary pressures.
As price increases show stickiness, the Federal Reserve is likely to maintain interest rates, with the financial environment continuing to tighten, which is unfavorable for risk assets like Bitcoin.
Glassnode data further corroborates a cautious outlook: second-quarter spot trading volume only increased slightly by $7.7 billion, while transfer volume at the beginning of the quarter fell by 36%, highlighting a lack of speculative momentum.
Related: After a record second quarter, how will the monthly close look? This week’s five key points for Bitcoin (BTC)
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “Bitcoin (BTC) Price Holds Range But Needs Fresh Demand to Break Higher”
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