Bitwise Just Sounded The Alarm—Bitcoin Could Explode Soon

The latest Crypto Market Compass from Bitwise Europe lands like a klaxon: every major gauge of risk appetite, liquidity and macro momentum is swinging in Bitcoin’s favor, and the firm argues the move could “provide a significant tailwind” for the benchmark asset. The study notes that Bitcoin already rebounded from $101,000 to about $108,000 in the past week as traders digested a potent cocktail of cooling inflation, thawing geopolitics and an increasingly dovish Federal Reserve stance.

Perfect Storm Brewing For Bitcoin

Bitwise’s proprietary Cryptoasset Sentiment Index has surged to its most optimistic reading since May—“now clearly signal[ing] a bullish sentiment again,” the authors write. Behind that surge lies an unprecedented torrent of capital into exchange-traded products: cumulative net inflows to global Bitcoin ETPs have reached a year-to-date record of $14.3 billion, with five consecutive sessions last week adding another $2.2 billion—or roughly 20,763 BTC—to the pile. “Cumulative net inflows … signal potential upside opportunity for the price of Bitcoin,” Bitwise says, adding that US spot ETFs are now on a 14-day winning streak that could eclipse the 16-day record set shortly after launch in early 2024.

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Why are investors suddenly embracing risk? Bitwise points to what it calls a “decline in macro uncertainty.” July may deliver new US trade accords with Canada, while Washington and Tehran have struck a surprisingly conciliatory tone; former President Donald Trump has even floated lifting sanctions if Iran remains peaceful.

On top of that, Fed Chair Jerome Powell has tied the timing of a resumption of rate cuts to progress on tariff talks—an alignment that leaves the door open to looser policy within weeks. The report sums up the mood: “The trifecta of declining geopolitical risks, trade policy uncertainty and potential monetary policy stimulus should continue to lift market sentiment and provide a significant tailwind for Bitcoin and other crypto assets.”

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On-chain signals look equally primed. Whale wallets (1,000 BTC or more) withdrew 8,740 BTC from exchanges last week, exchange reserves sank to 2.898 million BTC—just 14.6 % of supply—and net selling pressure on spot venues fell from $2.2 billion to only $0.5 billion.

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Derivatives paint a more nuanced picture: futures open interest slid by 20,000 BTC, and bearish perpetual funding rates hint at lingering short bias, but options markets show traders quietly standing down—put-call open interest fell to 0.59 while one-month implied volatilities eased toward 38%. Bitwise interprets the combination as “short-term consolidation” in the face of an intact longer-term uptrend.

Traditional markets are also thawing. Bitwise’s Cross-Asset Risk Appetite (CARA) index jumped from 0.31 to 0.49, reinforcing evidence that capital is rotating back into growth-sensitive trades. Some 70% of tracked altcoins beat Bitcoin last week, a breadth thrust historically associated with early-cycle bull phases.

In its bottom-line assessment, Bitwise stops short of price targets but leaves little doubt about direction: as long as geopolitical détente, trade breakthroughs and an accommodative Fed converge with relentless ETF inflows, “a decisive return in global risk appetite” is likely to keep Bitcoin on an upward trajectory. Should US spot ETFs secure just three more sessions of net inflows this week—surpassing their 2024 record—the firm suggests the market may discover how quickly a supply-constrained asset can react when the macro wind blows at its back.

At press time, BTC traded at $106,840.

Featured image created with DALL.E, chart from TradingView.com