Bitcoin is once again at the center of market optimism as a combination of bullish macroeconomic trends fuels speculation that the leading cryptocurrency could reach $116,000 before the end of July.
According to Markus Thielen, head of research at 10x Research, three key factors are converging to create what he calls a “perfect storm” for Bitcoin: surging institutional inflows into spot ETFs, growing uncertainty surrounding U.S. Federal Reserve policy, and a dramatic decline in Bitcoin balances held on centralized exchanges.
At the time of writing, Bitcoin is trading near $109,373 - a level that reflects increasing market confidence after recent consolidation. A rise to $116,000 would mark a 6.45% increase from current levels and a roughly 3.6% climb from its all-time high of $111,970, based on CoinMarketCap data.
A primary driver of the recent bullish sentiment is the resurgence of inflows into U.S.-based spot Bitcoin exchange-traded funds, which were launched in January 2024. Despite experiencing their first net outflow day on Wednesday after a 15-day streak of consistent inflows, total ETF investments since May 1 have reached $9.91 billion - representing roughly 20% of all inflows since the products went live, according to data from Farside Investors.
“These flows are increasingly outpacing price action, signaling institutional demand driven more by macro concerns than short-term momentum,” Thielen stated in a Thursday report. He believes institutional investors are viewing Bitcoin as a hedge against inflation and monetary policy risks rather than just a speculative asset.
The increase in ETF inflows aligns with renewed expectations that U.S. monetary policy could shift toward easing, particularly in a scenario where political leadership pressures the Federal Reserve to cut interest rates.
Trump and Fed Shakeup: Political Pressure on Monetary Policy
Thielen points to the political dynamics in Washington as another factor that could boost Bitcoin’s price. U.S. President Donald Trump, who returned to office following the 2024 election, has publicly criticized Federal Reserve Chair Jerome Powell, saying in April that Powell’s dismissal “can’t come fast enough.”
Such comments have reignited speculation that Trump may appoint a more dovish Fed chair, potentially ushering in a cycle of rate cuts.
“It may only be a matter of time before Trump nominates a new Fed chair more inclined toward rate cuts,” Thielen suggested, adding that the scenario recalls the 1970s when then-Fed chair Arthur Burns yielded to political pressure - a decision widely blamed for contributing to the inflation crisis of that era.
If Trump follows through on reshaping the Federal Reserve, markets could anticipate a looser monetary policy environment. Lower interest rates tend to favor risk assets like Bitcoin, which could see accelerated capital inflows from investors seeking higher returns outside of traditional instruments.
Exchange Outflows: Bitcoin Supply Shrinks to Multi-Year Lows
The third major catalyst supporting Bitcoin’s potential July rally is a notable and sustained reduction in available BTC on centralized exchanges - a metric closely watched as an indicator of supply-side pressure.
According to Thielen, Bitcoin balances on exchanges have declined for 98 consecutive days, marking the longest drawdown in exchange reserves since 2020. That trend, he notes, preceded the explosive bull market that took Bitcoin from below $10,000 to nearly $70,000 in under 18 months.
“Historically, such sustained outflows signal rising scarcity and mounting upside pressure,” said Thielen. “If this pattern continues, Bitcoin could be setting the stage for another breakout.”
Data from Glassnode and other on-chain analytics platforms confirm the trend, showing that more BTC is moving into long-term storage wallets and institutional custodial solutions - particularly those tied to ETFs and other regulated financial products.
The decline in liquid supply could intensify upward pressure if buying demand continues to rise, especially from institutional channels.
Technical Levels and Market Structure
Bitcoin’s price is currently testing the upper boundary of its multi-week consolidation range, hovering near $109,000–$110,000.
Analysts suggest that a sustained breakout above $112,000–$113,000 could serve as confirmation of a renewed bull phase, potentially unlocking a path toward the $116,000 target.
“The setup is technically sound - we’re seeing rising support, increasing institutional demand, and positive sentiment returning to the market,” said James Lavish, managing partner at the Bitcoin Opportunity Fund. “The only missing piece is a clear breakout above previous highs, and we’re getting close.”
Thielen also emphasized that a rally to $116,000 may not require extraordinary momentum. “A 6–7% move from current levels is modest by Bitcoin standards, especially when macro and on-chain signals are aligned,” he said.
Broader Market Context
Bitcoin’s projected rally comes at a time of rising interest in digital assets from traditional finance institutions. Alongside Deutsche Bank’s upcoming crypto custody service, major asset managers like BlackRock and Fidelity continue to expand their digital asset offerings. Recent moves by U.S. lawmakers toward developing a clearer regulatory framework for stablecoins and digital assets have also contributed to improved investor sentiment.
Moreover, the global economic environment remains uncertain, with inflation pressures lingering in key markets and geopolitical risks continuing to drive volatility. Bitcoin's decentralized and limited-supply design is increasingly appealing to investors seeking non-sovereign hedges in this climate.
While the stars appear to be aligning for Bitcoin, some analysts caution that a pullback is always possible, particularly if macroeconomic expectations shift or ETF inflows cool. Technical overbought conditions and profit-taking around the $110,000–$112,000 zone could trigger short-term volatility.
Still, Thielen remains confident that the current conditions - ETF demand, political tailwinds, and on-chain scarcity - provide a solid foundation for continued upward movement in the near term.
“July could prove to be a pivotal month for Bitcoin,” he concluded. “All it takes now is a decisive move above resistance to change the trajectory of the market.”