Matrixport Research: Bitcoin Enters Consolidation Phase, Funds Awaiting and Liquidity Tightening Resonates

After reaching a yearly high, Bitcoin has entered a more delicate phase: the price range is narrowing, volatility is decreasing, and market sentiment has shifted from "euphoria" to "wait-and-see." This is not the onset of a bear market, but a natural slowdown in the cycle rhythm. The Federal Reserve has repeatedly stated that it will not rush to cut interest rates, the dollar has stabilized and rebounded, global liquidity is tightening marginally, and the early inflow dividends brought by ETFs have basically been digested, with new buying pressure yet to take over. In the short term, Bitcoin is under macro pressure and facing structural adjustments, making the market resemble a "power-up cooling" phase.

Capital Withdrawal, Market Returns to Rationality: Liquidity is Tightening

On a macro level, the U.S. Treasury has recaptured over $800 billion through the Treasury General Account (TGA), compressing liquidity in the banking system. Federal Reserve officials have shifted to a "hawkish" tone, with interest rate cut expectations narrowing from three times this year to only about 1.8 times. This means that the key liquidity environment supporting Bitcoin is marginally weakening.

On-chain and holding data also confirm this: long-term holders are gradually taking profits, ETF funds have seen a net outflow of nearly $1.9 billion, and native funds are actively deleveraging, leading to a noticeable cooling of market positions. Historical patterns indicate that when prices operate below key cost ranges, the market often enters a "hand-over and repair period"—not the beginning of a decline, but a consolidation before an increase.

Dollar Rebound and Cooling Risk Appetite: Lack of Catalysts in the Short Term, Patience is the Best Strategy

The dollar index has rebounded from its lows, continuously pressuring Bitcoin. In the past five similar phases, Bitcoin's average adjustment range over 1 to 6 months has been between 11% and 31%. Meanwhile, Powell's latest remarks have weakened market expectations for "easing guarantees," cooling risk appetite. This is evident from the decline in volatility: Bitcoin's annualized volatility has dropped from 70% to 30%.

The disappearance of high volatility means the market is entering a more stable phase. For long-term investors, this period is more suitable for observation and positioning rather than chasing prices. If liquidity shows a turning point before December (such as the Fed signaling new easing or TGA funds flowing back into the market), Bitcoin may restart its upward movement. Until then, controlling positions and maintaining flexibility is a smarter strategy.

The current consolidation is not a prelude to a bear market, but a "reset period" within a long-term bull market. Institutional funds have not withdrawn, and structural position turnover is ongoing. In the crypto market, patience itself is an Alpha. At this moment, the comparison is not about who dares to leverage, but who can maintain faith and discipline during the quiet period.

The above views are derived from Matrix on Target. Contact us for the complete report from Matrix on Target.

Disclaimer: The market carries risks, and investment should be approached with caution. This article does not constitute investment advice. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.