On-chain data reveals some positive signals, but it is far from confirming a reversal.

Written by: Blockchain Knight

In the past week, signals from two major central banks have led Bitcoin to show completely different reactions.

The Bank of Japan raised interest rates to 1%, and the market was almost calm (previous rate hikes led to significant drops), with Bitcoin briefly dipping before quickly returning to around $66,000.

The real nerve was touched by the Federal Reserve, which maintained interest rates but released hawkish signals through the dot plot, causing Bitcoin to slide directly to $64,000.

This time, the Federal Reserve remained motionless; beneath the surface calm, there are undercurrents.

New Chairman Waller chaired the meeting for the first time and removed accommodative language from the statement, raising the year-end PCE inflation forecast from 2.7% to 3.6%. Out of 18 officials, 9 expect at least one rate hike this year, while 6 even see two rate hikes.

The market quickly repriced, with the probability of a rate hike in December approaching 85%. As a liquidity-sensitive asset, Bitcoin naturally came under pressure under this combination, with over $80 million in net outflows from spot ETFs on the day of the decision, and institutional funds began to avoid uncertainty.

Meanwhile, the job market continued to show resilience. Initial jobless claims fell to 226,000, and layoff levels remain at historic lows; the unemployment rate has stabilized at 4.3% for the third consecutive month; and 172,000 jobs were added in May, with a three-month average still around 188,000.

This is good news for workers, but bad news for the crypto market hoping for rate cuts, as strong employment data compresses the Federal Reserve's easing space, with real yields and the dollar rising simultaneously, repeatedly suppressing risk appetite.

However, on-chain data reveals some positive signals, but it is far from confirming a reversal.

Glassnode shows that spot order buying is being rebuilt, with passive buyers more effectively absorbing supply, implied volatility and option skew have both retreated from extreme levels, and volatility risk premium has even turned negative.

However, Bitcoin is still 15% lower than the real market average of $77,000, and nearly 10% lower than the short-term holder cost of $72,600. The MVRV of short-term holders is only 0.9, implying that recent entrants are averaging a loss of nearly 10%, and once the price rebounds close to their cost line, the selling pressure to break even may emerge at any time.

The realized market capitalization has shrunk by 1.45% over the past 90 days; although the speed is slowing, new capital is still net outflowing.

The reason why the Japanese rate hike was quietly absorbed by the market is due to the central bank's simultaneous commitment to limit long-term yields, promising to purchase approximately 2 trillion yen in government bonds monthly, which weakened the impact of arbitrage trading closures.

This rate hike of 25 basis points to 1% is the highest level since 1995, but the market had already priced in over a 90% chance before, and the easing of tensions in the U.S.-Iran conflict has mitigated the energy shock.

However, Japan's PPI rose 6.3% year-on-year in May, the pressure from energy costs remains, and if rate hikes continue, the attractiveness of yen-denominated financing will gradually decline, leading to a reconfiguration of the global liquidity landscape.

The real liquidity test still comes from the United States, which means that from now until December, every CPI, PCE, and non-farm report will become real-time input signals.

In the short term, Bitcoin is likely to oscillate within the $60,000 to $70,000 range, and a breakout requires clear macro catalysts. Although the on-chain structure is slowly improving, a real reversal still needs prices to recover the market average of $77,000 to confirm; otherwise, prolonged oscillation will become the main theme.