Bitcoin traded near $64,000 on Tuesday after failing four times to establish support above $65,000, leaving Wednesday’s U.S. inflation report as the immediate test for a market caught between renewed ETF demand and persistent institutional selling pressure.
The largest cryptocurrency slipped more than 1% during the day, reaching an intraday high slightly above $64,400 before weakening in Asian trading. Ether also fell, dropping almost 2% to roughly $1,880 and moving back below the closely watched $1,900 level.
Price action has narrowed Bitcoin’s short-term focus to the $65,000 ceiling. Kalchev said the repeated rejection at that level appeared to reflect growing short positions above the price rather than broad profit-taking by holders. In that view, a sustained break above $65,000 could expose the next major area around $70,000, while another failure would leave the market vulnerable to a return toward lower support.
Inflation report becomes the next market trigger
Economists expect Wednesday’s U.S. inflation report to show headline inflation easing to 3.4% year over year, with core inflation forecast to slow to 2.5%. A reading in line with, or below, those expectations would reinforce the disinflation narrative that gained traction after last week’s weaker payrolls data. A higher number could quickly alter expectations for U.S. monetary policy and pressure risk assets, including Bitcoin.
September rate-hike odds had already fallen to about 44%, from roughly 80% in late July, following the payroll contraction. The repricing has supported a more cautious market stance rather than a clear rush into risk assets, with traders awaiting confirmation that inflation is also cooling.
Policy uncertainty extends beyond the next inflation figure. Three committee members reportedly dissented in favor of a July rate increase, while the Jackson Hole symposium, scheduled for Aug. 27-29, is expected to offer another opportunity for Federal Reserve Chair Kevin Warsh to address the tension between a softening labor market and inflation that remains above target.
A September policy hold would not automatically signal a dovish turn. Markets will be watching whether Fed officials frame any pause as evidence that inflation has been contained or simply as time to gather more data.
ETF flows have yet to break the range
U.S. spot Bitcoin ETFs recorded more than $850 million in net inflows across five sessions last week, their strongest weekly intake since mid-April. The new week began less positively, with a reported $144 million outflow on Monday. Spot Ether ETFs also posted a $14 million outflow at the start of the week.
The flow pattern illustrates the market’s current imbalance. ETF buying has returned in size, yet Bitcoin has remained contained between roughly $64,000 and $67,000 over the past week. Howard attributed the range-bound action to ETF demand being offset by over-the-counter selling from miners and Strategy.
One market assessment also pointed to a potential $5 billion liquidation authorization associated with Strategy as an overhang, though an authorization does not itself establish that assets have been sold. Massabni linked recent whale-selling activity partly to Strategy offloading nearly 1,700 Bitcoin last week.
Miner selling was described as limited in the near term, leaving corporate treasury activity and large over-the-counter transactions as more prominent variables in the short-term supply picture. Large private sales can absorb ETF-related demand without immediately appearing as heavy selling on public order books, helping explain why strong fund inflows have not translated into a clean breakout.
Low Bitcoin volatility meets active hedging demand
Options markets point to a different form of caution. Selby noted that the CME CF Bitcoin Volatility Index reached 35.56 on Aug. 4, a multi-year low, indicating that Bitcoin’s realized price swings have compressed even as macroeconomic uncertainty remains elevated.
Treasury-market volatility has stayed well above its January low, according to Selby, creating an unusual backdrop: Bitcoin’s own volatility has subsided while traders remain sensitive to inflation, interest-rate expectations and geopolitical developments.
The options market also reflects steady call selling by miners and corporate treasuries using covered-call or call-overwriting strategies. In a covered-call trade, a holder sells an option that gives another party the right to buy Bitcoin at a predetermined higher price, collecting premium income in exchange for giving up some upside if the asset rallies sharply.
That supply of calls can add resistance near popular strike prices, particularly around the upper end of Bitcoin’s recent trading range. At the same time, demand for downside protection has persisted, suggesting traders are willing to pay for insurance against a sharp post-inflation move.
Ether faces a separate support test
Ether’s decline below $1,900 has placed attention on resistance near $1,940 and support around $1,820. The supplied market analysis said funding rates had fallen more than 30% in recent days after selling intensified near $1,940.
Funding rates are periodic payments exchanged between long and short positions in perpetual futures markets. A drop can indicate that bullish leverage is being reduced or that short positioning is becoming more attractive.
Mondal cited a net unrealized profit measure falling to negative 0.35 and identified $1,820 as a critical near-term floor. A sustained loss of that area could open a move toward $1,550, though Ether’s direction will likely remain closely tied to Bitcoin’s response to the inflation release and the broader appetite for risk.
Oil, gold and seasonality add to caution
Outside cryptocurrency markets, oil approached $90 a barrel amid stalled negotiations connected to the Strait of Hormuz, where fresh compensation demands from Washington affected talks with Tehran. Gold held near a 10-week high above $4,400, while equities remained close to record levels. The mix of strong equities, firm gold and rising oil points to a market balancing growth resilience against renewed inflation risks.
Bitcoin also enters a seasonally difficult period. Anderson noted that September has been Bitcoin’s weakest month on average since 2013, with an average decline of about 4%. Seasonality alone rarely determines market direction, but it leaves less room for a disappointing inflation surprise while Bitcoin remains unable to hold above $65,000.
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