Written by: Billy Bambrough, Forbes
Compiled by: AididiaoJP, Foresight News
Since June of this year, the Bitcoin market has been stuck in a rare sideways consolidation pattern, with prices fluctuating within a narrow range and volatility hitting historically low levels. Although market participants widely anticipate a so-called "ultimate catalyst" to break the deadlock, macro-level uncertainties are intensifying market anxiety.
Currently, the Bitcoin price is down about 50% from its all-time high recorded in October 2025. Even though BlackRock's digital asset head, Robert Mitchnick, recently expressed optimism, pointing to a "subtle but noticeable positive shift" in market sentiment and reiterating that Bitcoin has ended all five full bull-bear cycles at higher prices, the price has still failed to effectively break out of the current range.
Notably, BlackRock's Bitcoin ETF (IBIT) holdings are approaching 750,000 BTC, valued at approximately $50 billion, while US spot Bitcoin ETFs overall saw net inflows of over $850 million last week, the best weekly performance since mid-April. However, these positive signals have yet to translate into substantive upward momentum.
The core factor driving market sentiment from "calm" to "tense" lies in two sets of macro variables that are diverging in direction but heating up simultaneously.
First, the expanding US fiscal deficit, with a $1.8 trillion shortfall, is strengthening market expectations for "money printing."
Latest data from the US Treasury shows that the federal budget deficit in July alone reached $432 billion, the largest monthly shortfall since March 2021, pushing the cumulative deficit for fiscal year 2026 to $1.8 trillion, second only to the extreme highs seen during the 2020 pandemic. The total federal debt is approaching $40 trillion.
Against this backdrop, many crypto asset investors believe that government spending far exceeding revenue can only rely on debt issuance for financing; if the private sector's capacity to absorb it is limited, it may ultimately force the Federal Reserve to restart balance sheet expansion.
Prominent crypto investor Anthony Pompliano, in an interview with Fox Business, bluntly stated that government fiscal mismanagement will force continuous money printing, and assets like Bitcoin, gold, real estate, and stocks will benefit long-term from currency devaluation. He even predicted that Bitcoin's average annual gains could remain around 30% over the next two-plus decades.
BitMEX founder Arthur Hayes also noted in a recent analysis that the stronger the monetary expansion, the more solid the foundation for Bitcoin's valuation to rise, and stated he is increasing allocations to Bitcoin, physical gold, and gold mining stocks.
Second, however, the bond market is sending a completely opposite risk signal.
Global bond yields surged significantly this week, with the US 30-year Treasury yield climbing to its highest level since 2002, the 20-year yield reaching a new high since 2006, and the benchmark 10-year yield touching a peak since 2007.
Traders generally attribute this yield rise to a combination of multiple factors, including the continuously expanding fiscal deficit, financing demand growth from AI infrastructure development, sustained high international oil prices, and monetary policy path uncertainties triggered by the new Fed Chair, Kevin Warsh.
Sean Farrell, Head of Digital Asset Strategy at Fundstrat, pointed out that Bitcoin's 30-day realized volatility has fallen to one of its lowest historical ranges. He examined the past eight similar periods of extreme low volatility and found that the median absolute price movement for Bitcoin over the subsequent 60 days was 30.2%, with price increases and decreases each occurring four times, indicating this metric only predicts volatility intensity, not direction.
Based on the current price of approximately $64,000, a 30% increase could push the price near $83,200, while a decline of the same magnitude could see it fall back to around $44,800.
Farrell specifically emphasized that Bitcoin's recent rebound was partly driven by short covering, not large-scale influx of new capital; Bitcoin-denominated futures open interest has decreased by about 8% since Friday evening. He clearly identifies "a sustained rise in real bond yields" as a key variable that could break the current low-volatility pattern.
The strategy team at Yardeni Research also noted in a report that while it has not yet triggered a panic mechanism, they are closely monitoring whether bond market participants will take substantive action. They believe US Treasury yields remain within the normal range of 4% to 5% but are approaching the upper bound, warranting high vigilance.
The so-called "bond vigilantes," market forces that push up yields by selling bonds to force government or central bank policy adjustments, typically hit high-valuation risk assets first once they act.
The continued climb in bond yields has significantly reshaped the focus of the crypto market. Traders' attention to the Treasury market now exceeds their scrutiny of the Fed's short-term interest rate path.
Analysts from the crypto trading platform Bitunix point out that the market's core concern is no longer limited to whether the Fed will raise or lower rates, but increasingly focuses on whether long-term Treasury yields will continue their upward trend, whether geopolitical risks will evolve into sustained energy supply shocks, whether inflationary pressures will re-emerge, and whether the global risk premium will widen further.
If the 30-year Treasury yield remains persistently high while energy prices rise due to geopolitical tensions, stocks, cryptocurrencies, and other high-valuation assets could face systematic pressure.
Amidst this two-way risk landscape, market participants are gradually preparing psychologically for a potential deep correction.
Robin Singh, CEO of crypto tax services firm Koinly, stated that with US mid-term elections approaching, it's not unimaginable for Bitcoin to experience another sharp drop, and a price retreat to the $55,000 range is a plausible scenario. He believes historical experience shows markets often need a thorough washout—a sell-off that makes the final batch of bulls give up completely—before a cycle bottom can be confirmed.
In summary, on one hand, the monetary expansion narrative fueled by the huge fiscal deficit provides medium to long-term upward momentum for Bitcoin; on the other hand, rising actual funding costs reflected by surging bond yields are exerting substantive pressure on risk assets.
The current Bitcoin market exhibits a pattern of "exhausted sellers and观望buyers," while leveraged funds have already bet on a rebound in advance, creating inherent instability in the market's internal structure. Historical data indicates the probability of an absolute price movement of around 30% within the next 60 days has significantly increased. Regardless of the final direction, market participants need to be highly vigilant and make corresponding risk management preparations.
