Bitcoin price lacks foundation: 'borrowed strength' behind the rise

The recent rise in the Bitcoin price following the better-than-expected US CPI figures for June has little solid foundation, according to a new report from Bitfinex Alpha. The rally is described as ‘borrowed strength’: driven by a reassessment of macroeconomic expectations but not supported by structurally strong spot purchases or consistent ETF inflows.

Bitcoin is available at OKX and Bybit.

Macro optimism without real buying power

According to Bitfinex Alpha, Bitcoin reached its highest closing price since 22 June thanks to lower inflation in the US, but behind that move there is little genuine demand. There is a lack of sustained spot absorption, a positive Coinbase premium and price-independent ETF inflows. Without these three elements, the rise is vulnerable: as soon as the interest rate narrative shifts, the foundation for the rally falls away.

The better-than-expected CPI data is creating movement across the broader crypto market, but Bitfinex remains cautious. Bitcoin’s current price stands at $64.900, up 0.5% in the past 24 hours, still far from the crucial resistance zone.

The zone around $68.000 determines the direction

Bitfinex Alpha identifies the band between $68.000 and $68.300 as a key zone. Acceptance above this level confirms a bullish scenario, but sustained ETF inflows are necessary for that. On Tuesday 14 July, $181.1 million flowed net into Bitcoin ETFs, with BlackRock’s IBIT accounting for $138.9 million. Whether that trend continues will determine the coming weeks.

A rejection at that zone is a different story. If the funding rate rises above 15% and demand for put options remains high, a fall back towards the lows around $58.000 cannot be ruled out. This makes the upcoming ETF flow data all the more important as an indicator of the real demand behind the recent Bitcoin price move.