The crypto market remains uncertain, with Bitcoin fluctuating between $78K and $85K for weeks. Investors are growing restless, seeking a clear signal indicating the next big move.
However, market analysts say the real catalyst for Bitcoin’s breakout isn’t within the crypto industry itself—it’s rooted in macroeconomic conditions.
During the episode of The CoinRock Show, Matthias dissected the forces keeping Bitcoin in a choppy consolidation phase, pointing to two major factors: interest rates and liquidity.
Until there is a shift in these areas, Bitcoin’s price action will likely remain unpredictable.
Bitcoin Struggles to Gain Momentum
Bitcoin’s failure to sustain a meaningful rally after reaching $109K in March has left traders questioning whether the bull run is over.
With its price now hovering around $81K, the sentiment has shifted from euphoria to skepticism. Trading volumes across major exchanges have declined by nearly 30%, reflecting a cautious approach from both retail and institutional investors.
Altcoins have suffered even more, with many experiencing 30-50% corrections in recent weeks.
Ethereum has dropped to $1,800, while the Total Value Locked (TVL) in DeFi has declined from $95 billion to $85 billion, signalling a broader liquidity crunch.
Matthias addressed this lack of momentum, stating:
“We’re stuck in an annoying chop between $78K and $85K. Until something changes on a macro level, Bitcoin isn’t sending. No interest rate cuts, no QE—just chop, chop, chop.”
How the Federal Reserve’s Policies Are Holding Bitcoin Back
One of the biggest drivers of Bitcoin’s price action is the Federal Reserve’s monetary policy. Over the past year, the Fed has maintained a tight liquidity environment, keeping interest rates high and restricting the flow of capital into risk assets like crypto. This has prevented Bitcoin from continuing its rapid ascent.
Historically, bull markets in Bitcoin have coincided with periods of increased liquidity—such as during the COVID-19 pandemic, when massive stimulus measures flooded financial markets.
However, with the Fed focused on controlling inflation, Quantitative Easing (QE) remains off the table for now.
Until the Fed reverses course and begins lowering interest rates, traders are unlikely to see the rapid price acceleration that defined previous bull runs.
Crypto Market Uncertainty
Beyond the Fed’s policies, the political and economic landscape also influences Bitcoin’s future. The Trump administration’s aggressive tariff policies could significantly affect global financial markets.
If tariffs slow economic growth, the impact could spill over into the crypto space, affecting investor sentiment.
Matthias highlighted how these external economic factors are now playing a more dominant role in shaping Bitcoin’s market behaviour, noting:
“For the first time, we’re living in a Trump-dependent crypto market. Everything now hinges on liquidity, interest rates, and policy decisions outside of crypto.”
This shift is significant because, in previous cycles, crypto’s price action was largely dictated by internal market dynamics—such as Bitcoin halvings, institutional adoption, or network upgrades. However, macro forces have become the primary driving factor in today’s landscape.
Waiting Game for a Major Catalyst
Bitcoin remains in a consolidation phase, driven by macroeconomic forces rather than internal crypto factors. Until interest rates drop or liquidity improves, the market will likely stay choppy and unpredictable.
Key indicators to watch include Federal Reserve policy shifts, inflation data, and economic growth metrics influencing liquidity conditions.
Additionally, global financial policies, including tariffs and fiscal decisions, could impact investor sentiment and crypto market stability.
Until these factors align in favor of increased liquidity, Bitcoin’s next major move will be dictated by economic reality—not hype or speculation.
