Bitcoin briefly traded down to US$58,000 this week before recovering convincingly, signalling meaningful resistance at the US$60,000 level alongside genuine buyer interest on dips.
Two macro forces are weighing on digital assets. The first is an equity-led risk-off rotation: the Morningstar AI Index has fallen 6.1% over the past two days, pushing investors toward the dollar. The move carries a classic risk-off signature, with the Australian, New Zealand and Canadian dollars selling off while the yen held firm. The second is rates: core PCE landed in line at 3.4% in May, but consumer spending came in above expectation, reinforcing a hawkish Fed under new Chair Kevin Warsh.
Single-name fragility is also in focus. STRC, the yielding component of Strategy, has dropped to 75 from par at 100, with SATA down to 88. Strategy’s Bitcoin holding, at roughly 4% of total supply, is not a systemic risk, but it is weighing on sentiment. Global digital-asset investment products recorded US$1.4B in net outflows this week so far.
For portfolios, one signal is constructive: whale selling, the trigger for the October selloff, has cooled markedly, consistent with the four-year cycle estimate of a taper 6 to 9 months after onset. The caveat for positioning is that this cohort historically does not return as buyers until the next halving, not due until 2028.
We expect subdued near-term conditions, with inflation the key variable. Higher oil prices feeding through from the Iran situation are likely to keep CPI elevated for the next couple of months.
On Ethereum, the Ethereum Foundation has cut 54 staff, around 20% of its workforce, reorganising into five domain clusters. The CLARITY Act, which could benefit Ethereum the most, has cleared the Senate Banking Committee 15 to 9, but a floor vote and House reconciliation remain, pointing to an August window at the earliest.
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