This report is for professional investors and information purposes only. Retail customers should not rely on it. Not investment advice or a personal recommendation. Cryptoassets are high risk and volatile and you may lose all capital invested. Please see full risk information at the end of this document.
- Performance: Geopolitical tensions and energy market disruptions continued to drive macro volatility, but also reinforced the strategic relevance of scarce, globally neutral assets such as bitcoin. Against this backdrop, bitcoin showed notable resilience, supported by strong institutional demand and improving relative performance during periods of recovering risk appetite. While markets remain sensitive to macro developments, the underlying demand structure for bitcoin appears to be strengthening, providing a more constructive medium-term outlook.
- Macro: The macro backdrop remains characterised by an oil-driven inflation shock and rising expectations, while bond markets appear complacent amid mounting risks of foreign Treasury selling and structurally higher yields. At the same time, policy dynamics – including implicit “shadow QE,” potential Fed easing bias, and declining real rates – are gradually improving liquidity conditions, which bitcoin has already begun to anticipate. With much of the macro downside likely priced in and additional tailwinds emerging from easing financial conditions and ongoing structural developments (including progress on quantum resilience), the risk-reward profile for bitcoin appears increasingly constructive despite lingering macro uncertainty, although further downside remains possible.
- On-Chain: A range of on-chain models displays characteristics that have historically been observed in advanced phases of market contraction, though these models are not predictive and significant further downside remains possible, with several indicators pointing toward a potential trough forming over the coming months. Furthermore, the market appears to be at a point of equilibrium, as evidenced by subdued liquidity conditions and a convergence of key cost-basis levels, with price now approaching this zone. The interaction between price and this cost-basis cluster is likely to serve as an important reference point for assessing the evolution of market structure over the coming weeks. The coexistence of tightening liquidity and subdued volatility expectations highlights a growing divergence, suggesting the market may be approaching an inflection point. Historically, such regimes of compression have preceded expansions in volatility, as the market resolves toward a clearer directional trend.
Chart of the Month
Performance
The past month was characterised by a highly unstable macro regime dominated by geopolitical developments in the Middle East, with the evolving conflict between the United States and Iran acting as the primary driver of cross-asset price action. Market conditions oscillated between acute risk-off episodes driven by energy supply disruptions and intermittent recoveries in risk appetite on the back of temporary de-escalation signals. As a result, both traditional financial markets and bitcoin remained largely headline-driven, with elevated volatility persisting throughout.
At the core of the macro backdrop was the disruption of the Strait of Hormuz, a critical artery for global energy flows. Periods of near-complete closure materially impaired energy supply chains, pushing crude prices sharply higher and reinforcing a supply-side inflation shock. Brent crude temporarily moved above prior highs, while persistent dislocations in oil-in-transit data pointed to ongoing inventory drawdowns across major economies. Although intermittent improvements in vessel traffic – facilitated in part by alternative arrangements such as Iran's toll-based passage system (reportedly payable in bitcoin) – provided short-lived relief to markets, although the broader energy supply picture remained structurally constrained.
This energy shock fed directly into inflation dynamics and monetary policy expectations. Market-implied inflation expectations moved higher over the period, supported by both rising energy prices and a notable increase in consumer inflation expectations, as reflected in survey-based measures. While realised CPI data remained somewhat contained due to offsetting disinflationary forces in core components such as shelter, forward-looking indicators suggested an elevated risk of inflation expectations becoming unanchored. Consistently, expectations for Federal Reserve policy shifted meaningfully, with prior rate-cut expectations largely repricing toward a more hawkish trajectory amid tightening financial conditions.
At the same time, the macro environment remained characterised by a complex interplay between inflationary and disinflationary forces. On one hand, tighter financial conditions, rising real yields, and episodic USD liquidity stress acted as a drag on risk assets. This was evident in concurrent sell-offs across US Treasuries and gold during periods of heightened stress, reflecting a broader demand for USD liquidity. On the other hand, structural forces – including supply chain fragmentation, near-shoring trends, and the gradual erosion of global trade integration – continued to exert a more persistent inflationary bias.
Despite these headwinds, there were also signs of cyclical resilience in the US economy. Survey-based indicators such as ISM Manufacturing and Services remained in expansionary territory, with manufacturing in particular surprising to the upside. This resilience, combined with the structural shift of the US toward energy self-sufficiency, contributed to a partial moderation in recession expectations over the course of the month, even as market-based probabilities remained elevated overall which also supported the rally in bitcoin.
Within this macro context, bitcoin and broader cryptoassets exhibited a mixed but ultimately relatively resilient performance profile. Early in April, digital assets underperformed amid tightening financial conditions and broad-based risk aversion. However, as the month progressed, cryptoassets increasingly participated in – and at times outperformed during – risk-on recoveries triggered by temporary geopolitical de-escalation.
Notably, there were emerging signs of a rotation in investor preferences, with capital flowing out of traditional safe-haven assets such as gold into bitcoin ETPs.
This was reflected in a sharp reversal in cumulative flows, alongside a marked outperformance of bitcoin relative to gold since the onset of the geopolitical escalation. This dynamic is consistent with bitcoin's historical tendency to perform well in reflationary environments and suggests that, at the margin, bitcoin continued to be perceived as a higher-beta expression of improving liquidity conditions.
Importantly, institutional demand for bitcoin strengthened materially over the course of the month. Net inflows into US spot bitcoin ETFs accelerated to their highest levels since the beginning of the year, while cumulative global ETP flows reached new year-to-date highs. In parallel, treasury company demand – most notably from Strategy (MSTR) via its preferred equity issuance programme – intensified significantly, with estimated purchases exceeding newly mined supply over sustained periods.
This surge in institutional demand acted as a partial counterbalance to ongoing on-chain selling pressure, as reflected in still-negative realised cap dynamics. While selling activity moderated compared to the previous month, it remained a non-negligible headwind, highlighting an ongoing redistribution phase within the market.
From a market structure perspective, a key technical level emerged around the estimated cost basis of US spot bitcoin ETF investors (approximately $81k). This level represents an important inflection point for market sentiment, as a sustained move above it would shift a large cohort of investors back into unrealised profit territory. We think that this is one of the key ‘demarcation lines' to watch between an overarching bull or bear market for bitcoin (chart-of-the-month).
In addition to macro and flow-driven factors, idiosyncratic developments also played a role. In particular, renewed attention on quantum computing risks and proposed mitigation frameworks contributed to a modest repricing of bitcoin's perceived long-term risk profile. While current market pricing suggests that quantum risk remains relatively contained, ongoing progress in this area may act as a supportive narrative over the medium term, even as unresolved vulnerabilities – particularly related to lost coins – persist as a tail risk.
Overall, the monthly performance of bitcoin can be characterised as a function of two dominant forces: global liquidity conditions and geopolitical risk. While bitcoin has already adjusted meaningfully to tighter financial conditions, its continued sensitivity to broader risk asset performance – particularly equities – suggests that downside risks remain in scenarios of further macro deterioration.
At the same time, strengthening institutional demand, improving relative performance versus traditional assets, and resilience during episodic risk-on phases point to an increasingly robust underlying demand structure. However, given the still-fragile geopolitical backdrop and the central role of energy markets in shaping macro outcomes, volatility is likely to remain elevated in the near term.
Bottom Line: Geopolitical tensions and energy market disruptions continued to drive macro volatility, but also reinforced the strategic relevance of scarce, globally neutral assets such as bitcoin. Against this backdrop, bitcoin showed notable resilience, supported by strong institutional demand and improving relative performance during periods of recovering risk appetite. While markets remain sensitive to macro developments, the underlying demand structure for bitcoin appears to be strengthening, providing a more constructive medium-term outlook.
Macro Environment
We continue to see elevated macro stress from the oil price shock via rising inflation expectations, potential central bank tightening and higher yield expectations.
In this context, bond markets still appear to be somewhat complacent because of relatively low inflation market-based inflation – essentially markets still think the Strait of Hormuz situation is ‘transitory' – as shown by the discrepancy between commodity prices and market-based inflation expectations (CPI swaps) highlighted in our previous edition in April.
Meanwhile, US inflation expectations by consumers (University of Michigan survey) and businesses (ISM Services) have continued to rise.
In general, the oil price shock has eased a bit due to a relaxation in oil prices but still feeds into CPI inflation via elevated gasoline and transportation costs. Another channel that is bound to drive higher headline inflation numbers is fertilizer and food price inflation which have been trending higher due to the shortage of fertilizer exports from the Middle East. Energy and food prices are the main components of the headline consumer price index.
A key risk for bond markets, and by derivation other financial markets as well, is that elevated oil prices may prompt major holders of US Treasury such as China or Japan to continue selling off parts of their bond holdings to cover their higher oil import costs.
In fact, one can replicate the behaviour of the US 10-year Treasury yield by looking at the Yen-Dollar and Yuan-Dollar exchange rates in conjunction with the oil price.
China and Japan - the two largest foreign holders of US Treasuries - accumulate dollars through trade surpluses, much of which is tied to energy imports priced in USD. When their currencies weaken against the dollar and oil prices rise simultaneously, their energy import bills surge in local currency terms, forcing both sovereigns to liquidate USD reserves - including Treasuries - to stabilise their currencies and cover domestic costs.
The transmission differs slightly by country. In China, yuan weakness prompts PBoC intervention via USD asset sales while simultaneously eroding the current account surplus that would otherwise recycle dollars back into US bond markets. In Japan, where nearly all energy is imported, yen depreciation compresses corporate and pension fund margins, triggering capital repatriation and potential MoF intervention - both of which reduce Treasury demand.
The composite index (WTI × USDJPY × USDCNH) therefore functions as a real-time gauge of foreign Treasury demand destruction: when it rises, both major sovereign holders face simultaneous pressure to reduce - rather than accumulate - US bond exposure. The natural market-clearing mechanism is higher yields.
Index = WTI × USDJPY × USDCNH (2022-01-01 = 100)
Higher = greater pressure on China & Japan to sell US Treasuries
That being said, a major factor which might have contributed to a limited rise in bond yields is a type of ‘shadow QE' conducted by the Fed in conjunction with the US Treasury. More specifically, while the Fed has been increasing its holdings of short-dated Treasury bonds, the US Treasury department has been conducting buybacks of long-dated Treasury bonds while issuing short-dated T-bills to refinance old maturig debt. In fact, recent operations have reached around $15 bn per transaction - at the upper end of the Treasury's buyback program.
We think that this kind of ‘shadow QE' already represents a form of ‘yield curve control' policy to limit the rise in bond yields at the long end of the curve.
As a result, the Fed's measure of net liquidity has been inching up since late last year which also tends to be net tailwind for bitcoin and other cryptoassets.
On a positive note, financial conditions have eased a bit again – which bitcoin has anticipated in advance.
As highlighted in our previous edition of the Bitcoin Macro Investor , bitcoin tends to be that ‘macro canary in the coal mine' – an asset that has historically anticipated both deteriorations and improvements in liquidity and financial conditions well in advance.
In this context, it is worth highlighting that our leading credit index has also reversed somewhat – confirming the rallye in BTC/Gold which implies easing credit conditions and easing pressure on the private credit complex in the US.
*Tracks the performance of high yield bonds, leveraged loans, and BDCs
The reversal was also supported by a re-acceleration in institutional demand via bitcoin treasury companies – in particular Strategy (MSTR) – as well as bitcoin ETPs. Institutional investors continued to absorb more than the new supply in April and also mitigated some of the ongoing selling pressure visible in on-chain data.
Net Institutional Demand shown as 1-month change
Net Institutional Demand = Global ETPs + Treasury Companies – New Supply
As a result, we have also seen a repricing of that ‘macro discount' we have been highlighting in previous editions of the Bitcoin Macro Investor as well. More specifically, forward-looking indicators in our macro indicator have come down while bitcoin has rebounded from its lows.
Our key takeaway from this chart – which we have reiterated in previous reports as well – is that a lot of ‘bad news' appears to be reflected in bitcoin's price already which may limit further downside risks, even as forward-looking economic expectations continue to decline.
*based on PCA factor loadings of BTC to global growth expectations;
Source: Bloomberg, Bitwise Europe
As far as forward-looking surveys are concerned, there is an interesting dichotomy between between weak domestically exposed companies and relatively strong internationally exposed companies in the US right now: While the ISM Manufacturing Index and regional indices have continued to improve, small business optimism has continued to deterioate. In particular, NFIB small business capex plans have declined to the lowest level since Global Financial Crisis in 2008. The weakness in both the NAHB housing market index and University of Michigan consumer sentiment corroborates that view. Although the ultimate outcome of that divergence remains uncertain it will likely lead to a continuation of the ‘K-shaped economy' with higher unemployment in the near term.
That said, continuing weakness in the US labour market may prompt the Fed to keep rates unchanged despite the rise in inflation.
In fact, at the time of writing this report in late April, Fed Funds Futures are still pricing in no rate hikes and are even anticipating a small reduction in the Fed Funds Rate until mid-2027.
The change in Fed gouverneurship may induce short-term uncertainty around the future path of US monetary policy though. Kevin Warsh is expected to take over as Fed chairman in mid-May conditional on Senate approval.
It is worth highlighting that Kevin Warsh was a member of the Federal Reserve's Board of Governors from February 2006 through March 2011, meaning he was directly involved during the rollout of the initial quantitative easing programs. QE1 - centered on large-scale purchases of mortgage-backed securities - was launched in November 2008, followed by QE2 in November 2010. Both initiatives were implemented while Warsh was still in office, and he aligned with the prevailing consensus at the time. So, we expect Warsh to show an easing bias if faced with a deterioration in economic conditions.
Generally speaking, if the Fed keeps nominal rates unchanged, while inflation continues to accelerate, it already represents an indirect way of monetary policy easing via decling real interest rates that tend to be a tailwind for asset price inflation.
The reason is that changes in real interest rates are probably one of the best high-frequency indicators for the stance of monetary policy.
We think that scarce assets like bitcoin may benefit from such an easier monetary policy environment especially if the Dollar continued to depreciate.
In particular, because changes in monetary policy expectations and real yields tend to lead changes in financial conditions more broadly.
What is more is that a standard Taylor Rule based on core inflation and the unemployment rate implies a higher Fed Funds Target Rate. In general, the stronger this divergence becomes, the easier the stance of current monetary policy relative to the existing economic environment.
As far as bitcoin is concerned, historically it has tended to perform best in negative real interest rate environments as well as shown here.
Besides, based on our quantitative macro factor model, the Dollar has been the most dominant macro factor for bitcoin over the past 6 months. We are also observing a negative performance sensitivity of bitcoin to that Dollar factor. In other words, an appreciation of the Dollar was associated with a negative performance of bitcoin and a depreciation was associated with a positive performance of bitcoin.
Macro factors are derived from a principal component analysis. See the detailed methodology here.
However, it is worth noting that bitcoin has diverged sharply from global money supply which ahs continued to make new all-time highs – bitcoin's rolling correlation to global money supply is the most negative on record.
If and when this relationship reasserts itself, we may see a significant rally again – we think that continued progress on the quantum front may be a major catalyst for this.
Recent developments around quantum resilience have added a constructive, albeit still largely theoretical, dimension to bitcoin's long-term investment case. In particular, proposals such as BIP-361, alongside parallel research initiatives by Blockstream, aim to strengthen Bitcoin's cryptographic robustness against potential advances in quantum computing. While these approaches differ in implementation, they collectively suggest that quantum-resistant transaction schemes may be introduced without fundamentally altering Bitcoin's core protocol architecture. At this stage, these solutions remain early and are not yet practical for widespread adoption, but they signal continued progress in proactively addressing a widely discussed tail risk.
As such, the market appears to assign only a limited near-term probability to quantum-related disruption, with recent developments potentially contributing to a gradual reduction in bitcoin's perceived long-term risk premium as highlighted in one of our recent Crypto Market Compass reports as well.
Bottom Line: The macro backdrop remains characterised by an oil-driven inflation shock and rising expectations, while bond markets appear complacent amid mounting risks of foreign Treasury selling and structurally higher yields. At the same time, policy dynamics – including implicit “shadow QE,” potential Fed easing bias, and declining real rates – are gradually improving liquidity conditions, which bitcoin has already begun to anticipate. With much of the macro downside likely priced in and additional tailwinds emerging from easing financial conditions and ongoing structural developments (including progress on quantum resilience), the risk-reward profile for bitcoin appears increasingly constructive despite lingering macro uncertainty.
On-Chain Developments
Bear Market Progress
Bitcoin has remained range-bound between $60k and $80k since January 2026, with price largely consolidating sideways. This price action follows the largest drawdown of the cycle, with price declining from $126k to $60k, a ~52% retracement. From this perspective, October 2025 can be considered the cyclical peak, with subsequent price action therefore reflecting a bear market regime.
On this basis, the market has been in a bearish regime for approximately seven months. In this section, we assess a range of bear market projection models to estimate the potential remaining duration.
Building on our Coins Transferred Across Bear Markets framework, we continue to monitor how supply is reallocated between the cycle peak and the eventual trough. The core premise remains that bear phases facilitate a rotation of coins away from less committed holders toward participants with longer-term conviction.
As this process advances, incremental sell pressure tends to diminish, gradually constraining available supply. When demand begins to outweigh this reduced supply, price momentum can shift higher, lifting large portions of the supply back into profit. Historically, this transition has coincided with a broader improvement in market sentiment and has often marked the early stages of a new cycle.
To date, approximately 8.2 million BTC have been redistributed during the current cycle. In prior cycles, macro bottoms have generally formed once cumulative redistribution reached the 9–10 million BTC range. Based on the current pace of transfer, this would imply that the redistribution process may approach saturation within the next 1–2 months under a base-case scenario.
Another way to assess the transfer of coins from weaker to stronger hands is by measuring the share of profit- and loss-bearing supply held by Long-Term Holders (LTHs). LTHs are defined as investors who have held coins for longer than 155 days and are typically more price-insensitive and long-term oriented than newer entrants into the market.
As the proportion of total loss-bearing supply held by Long-Term Holders increases (LTH supply in loss divided by total supply in loss), it suggests that new investors who are underwater on their positions are remaining steadfast and are transitioning into long-term holders. Over time, this results in a shift in investor composition, where more reactive, short-term participants exit, and long-term holders absorb a growing share of supply.
Historically, when the share of losses held by LTHs exceeds their share of profits, it has signalled a transition toward a new cycle. In such regimes, long-term holders dominate both profitable and loss-bearing supply, effectively becoming the primary active participants. As a result, coins become increasingly inert, requiring more significant price moves to incentivise distribution.
We can estimate the timing of this crossover between loss and profit shares by analysing the 30-day rate of change in both series and applying a Monte Carlo simulation to model potential paths. The model suggests the crossover is projected in roughly 45 days. A Monte Carlo simulation of possible paths supports this view, indicating a 65% - 87% probability of crossover within 30 to 180 days. However, these results are based on simulated scenarios and should not be interpreted as a forecast.
A common observation in financial markets is that bear markets tend to end once sufficient investor pain has been absorbed. One way to quantify this financial pain is by measuring the number of trading days during which the percentage of circulating supply in profit falls below its –1σ band across each cycles peak to subsequent low.
Historically, Bitcoin cycle bottoms have occurred after roughly 115 to 179 cumulative below-threshold days. With only 58 days recorded in the current cycle, the model suggests the market remains within the bottoming process. Extrapolating from prior cycles, the implied window for a potential cycle low spans 2-4 months.
Bands = full-history mean ± 1 SD of % Supply in Profit.
Cumulative days below -1 SD between cycle high to low.
On balance, these models suggest the cycle low may be approaching, or may have already occurred, with a base case of 1–2 months and a wider range of 1–4 months. That said, these projections are derived from historical patterns, and prior cycle behaviour may not fully reflect current market dynamics.
Volatility Complacency
Bitcoin has recorded a strong performance this month, rising by 11.8%. However, beneath the surface, broader liquidity conditions remain notably compressed.
A key indication of this compression can be observed in profit- and loss-taking dynamics. Net Realised Profit/Loss has narrowed to just –$142mn, effectively at equilibrium.
This suggests the market may be at a decision point from a liquidity perspective, with capital inflows and outflows largely counter-balancing and neither regime asserting dominance. Historically, similar periods of indecision have tended to precede increases in volatility as the market moves to establish a clearer directional trend, although the timing remains uncertain.
At a more granular level, the SOPR (Spent Output Profit Ratio) metric, which provides insight into the average profit or loss multiple locked in across spent coins, reinforces this view.
Notably, profit multiples remain clustered around breakeven, indicating that the average coin is being transacted with minimal realised profit or loss. Taken together, these metrics point to a market operating in a low-activity, low-conviction regime.
Further supporting this, the Sell-Side Risk Ratio which quantifies the magnitude of liquidity flows. This is achieved by comparing the absolute value of realised profit and loss to the Realised Cap, a proxy for the total capital committed to the asset. As such, it provides a measure of current liquidity conditions relative to the broader capital base.
At present, the ratio has declined through its -1σ band to historically low levels, with only 4.5% of trading days recording a lower value. This reinforces the view that capital that liquidity conditions within the current range remain tight.
Finally, moving to the options market, which serves as the primary venue for pricing future volatility and uncertainty, it appears options traders are largely unconcerned by the liquidity compression across the broader market.
Across the term structure, at-the-money implied volatility remains suppressed relative to its 3-year rolling percentiles. Front-end implied volatility is modestly elevated, while longer-dated tenors remain significantly depressed, suggesting that options markets are pricing relative stability over the medium term rather than positioning for an imminent shift to higher volatility. Typically speaking, complacency in the options market has often been a strong contrarian indicator.
Notably, macro volatility expectations remain elevated across multiple measures despite the recent uptick in price. This suggests a degree of complacency among investors regarding the stability of the current market environment, with options markets pricing in a relatively stable medium-term outlook despite contracting liquidity conditions.
Key Pricing Levels
With investors showing relative complacency toward volatility, and geopolitical risks continuing to loom over financial markets, it is useful to review key pricing levels to anchor Bitcoin's internal dynamics within the broader macro context.
Notably, key pricing levels across on-chain metrics, the ETF complex, and technical analysis are converging within a similar range. These include:
- The True Market Mean at $78.2k which estimates the average acquisition price of active investors by excluding supply considered lost or dormant (e.g. early miner and Satoshi-era coins).
- The Short-Term Holder Cost Basis (STH-CB) at $80.5k, representing the average purchase price of newer market entrants and historically acting as a delineator between local bull and bear regimes.
- The Average ETF Cost Basis at $83.2k which has emerged as a relevant reference point following the growth of the spot ETF complex.
- The technical $80k level, marking the structural breakdown point that has yet to be reclaimed.
The convergence of these levels across multiple market segments, particularly those reflecting the aggregate cost basis of participants, suggests this zone may represent a current equilibrium point. This is further supported by the observed balance in profit- and loss-taking dynamics, indicating that investor sentiment and behaviour are broadly in equilibrium.
Historically, sustained acceptance above comparable cost-basis clusters has been associated with improving market conditions and a transition toward more constructive regimes. Conversely, failure to reclaim and hold these levels has typically coincided with continued consolidation or further downside exploration.
In this context, the interaction between price and this cost-basis cluster is likely to serve as an important reference for assessing the evolution of market structure over the coming weeks.
While volatility risks remain elevated, it is sensible to assess potential downside levels in the event of a severe rejection from the aforementioned cost-basis range.
The Realised Price at $54.2k approximates the average acquisition price across all investors. Complementing this, the Median Realised Price at $64.1k reflects the acquisition price of the median investor. Together, these metrics capture the central tendencies of the holder base.
Historically, both levels have acted as key structural support in late-stage bear markets, marking zones where spot price converges with underlying cost bases and where long-term demand tends to re-emerge.
Bottom Line: A range of bottoming models suggests Bitcoin may be progressing through the latter stages of its bear market, with several indicators pointing toward a potential trough forming over the coming months.
Furthermore, the market appears to be at a point of equilibrium, as evidenced by subdued liquidity conditions and a convergence of key cost-basis levels, with price now approaching this zone. The interaction between price and this cost-basis cluster is likely to serve as an important reference point for assessing the evolution of market structure over the coming weeks.
The coexistence of tightening liquidity and subdued volatility expectations highlights a growing divergence, suggesting the market may be approaching an inflection point. Historically, such regimes of compression have preceded expansions in volatility, as the market resolves toward a clearer directional trend.
Bottom Line
- Performance: Geopolitical tensions and energy market disruptions continued to drive macro volatility, but also reinforced the strategic relevance of scarce, globally neutral assets such as bitcoin. Against this backdrop, bitcoin showed notable resilience, supported by strong institutional demand and improving relative performance during periods of recovering risk appetite. While markets remain sensitive to macro developments, the underlying demand structure for bitcoin appears to be strengthening, providing a more constructive medium-term outlook.
- Macro: The macro backdrop remains characterised by an oil-driven inflation shock and rising expectations, while bond markets appear complacent amid mounting risks of foreign Treasury selling and structurally higher yields. At the same time, policy dynamics – including implicit “shadow QE,” potential Fed easing bias, and declining real rates – are gradually improving liquidity conditions, which bitcoin has already begun to anticipate. With much of the macro downside likely priced in and additional tailwinds emerging from easing financial conditions and ongoing structural developments (including progress on quantum resilience), the risk-reward profile for bitcoin appears increasingly constructive despite lingering macro uncertainty, although further downside remains possible.
- On-Chain: A range of on-chain models displays characteristics that have historically been observed in advanced phases of market contraction, though these models are not predictive and significant further downside remains possible, with several indicators pointing toward a potential trough forming over the coming months. Furthermore, the market appears to be at a point of equilibrium, as evidenced by subdued liquidity conditions and a convergence of key cost-basis levels, with price now approaching this zone. The interaction between price and this cost-basis cluster is likely to serve as an important reference point for assessing the evolution of market structure over the coming weeks. The coexistence of tightening liquidity and subdued volatility expectations highlights a growing divergence, suggesting the market may be approaching an inflection point. Historically, such regimes of compression have preceded expansions in volatility, as the market resolves toward a clearer directional trend.
Appendix
Cryptoasset Market Overview
Cryptoassets & Macroeconomy
Cryptoassets & Multiasset Portfolios
Earliest data start: 2011-01-03; data as of 2026-04-01
Cryptoasset Valuations
On-Chain Fundamentals
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