Bitcoin's Weak Response to Good News Sparks Market Concern
The latest inflation numbers for July show core inflation at 2.5%, but Bitcoin and equities have barely responded to this news, sparking concern that demand remains absent in the market.
Policy remains static with the Effective Fed Funds Rate still above core inflation, keeping real rates restrictive. A healthy market would have treated benign news like this as an opportunity to build on existing momentum, but instead price has stagnated.
The cost-basis ladder shows spot prices wedged between the Median Realized Price at $63K and the Short-Term Holder Cost Basis at $68.7K, with sellers tiring and buyers missing. Sellers are underwater, making them quick to sell into recoveries, while break-even has been rejected nine times since the October top.
The ETF complex has stopped selling, but inflows remain minimal. Net flows turned positive in July for the first time in months, though at a small fraction of any past accumulation wave. Coins continue to land on exchanges, adding supply pressure to an already thin market.