**[Signals of Late-Stage Bitcoin Bear Market Emerge: Volatility and Liquidity Compressed to Multi-Year Lows, Macro Environment Shows Early Signs of Recovery]** BlockBeats News, August 17 — Bitfinex released its latest market report, indicating that Bitcoin continues to trade within a narrow range, with volatility, trading activity, and liquidity simultaneously compressed to levels consistent with the late stages of a bear market. The current BTC price is near the median realized price of $63,200, while $67,176 remains a key resistance level for short-term holders to return to profitability. Demand has visibly weakened: U.S. spot Bitcoin ETFs recorded approximately $385 million in net outflows last week, corporate treasury activity turned negative, spot trading volume fell to multi-year lows, and Bitcoin transaction speeds hit a seven-year low. In such a thin market, even small changes in capital flows could trigger sharp movements in either direction. The macro backdrop is becoming more favorable. July's CPI and PPI both softened, reducing expectations for further rate hikes by the Federal Reserve. Short-term U.S. Treasury yields have declined, and the S&P 500 reached an all-time high. However, the details are not as benign as the headline data suggests. Inflation moderation is primarily driven by falling energy prices, while service sector prices remain resilient. Meanwhile, rising costs for computing power and AI infrastructure are creating new supply-side inflation pressures. A key divergence lies in the fact that a looser financial environment has boosted traditional risk assets but has not provided the same lift to crypto assets. Stablecoin supply has declined from its May peak, and spot ETFs recorded net outflows during the same week the stock market hit new highs, indicating that the market is pricing in future liquidity while crypto still relies on capital that has yet to fully transition on-chain. The core issue is shifting from whether monetary conditions improve to whether such improvements can generate actual capital inflows into crypto. If spot ETFs resume sustained inflows and stablecoin supply expands again, reconnecting the transmission mechanism, this could act as a catalyst for Bitcoin to break out of its prolonged low-volatility phase. Until then, despite the increasingly constructive macro environment, this crypto rebound remains underfunded. With participation currently at extremely low levels and BTC holding key realized price support, a return of liquidity could lead to a sharp increase in volatility, with the market structure leaning toward an upward breakout. [Original Link]