Cryptos exit month-long ranges, can the breakout hold?

Fed repricing drives crypto to three-week highs

After more than a month of range trading within breathing distance of yearly lows, major cryptocurrencies have regained momentum as Tuesday's lower-than-expected US inflation data prompted investors to scale back Fed rate hike bets, supporting risk assets and helping propel prices out of their recent consolidations.

Interestingly, after trading in a relatively subdued manner in recent weeks, more akin to gold than equities, Bitcoin joined the post-CPI rally in risk assets. Whether this marks a lasting shift in behaviour remains to be seen, but the move suggests macro sentiment and rate expectations continue to be important drivers of the cryptocurrency.  

Bitcoin rose more than 4% and Ether more than 7% to trade near three-week highs around $65,000 and $1,900, respectively, after being boxed into the same ranges since early summer. Resistance near $64,500 and $1,825 repeatedly capped rallies, while support at $58,000 and $1,550 absorbed selling pressure. But can the revival hold? 

Sentiment improves, but conviction stays scarce

Despite the recent bounce, which admittedly offers some relief to a year-to-date battered market, caution persists. While softer inflation data has revived risk appetite, the recovery still rests on fragile foundations.  

ETF flows have stabilised after eight consecutive weeks of heavy outflows, lending modest support to sentiment, though inflows are marginally positive and remain far from signalling a broad-based return of demand. Encouragingly though, investor resilience appears to be improving, suggesting the heavy selling pressure that drove roughly $4 billion out of Bitcoin funds in June may be easing.

That has fuelled hopes that Bitcoin is carving out a medium-term floor between $57,000 and $63,000. However, subdued trading volumes and slower purchases from Strategy, one of Bitcoin's largest corporate buyers, suggest it remains too early to declare a lasting recovery, with investors still waiting for clearer signs of institutional demand.

Regulatory updates offer limited support 

On the regulatory front, recent developments have offered only modest support. Circle, the issuer of USDC, one of the world's largest stablecoins, received approval to establish a national trust bank, marking another step towards greater institutional adoption and regulatory legitimacy for the sector.

Meanwhile, progress in Congress on the CLARITY Act remains uncertain amid opposition from some Senate Democrats and banking groups, despite President Trump's push to advance the bill ahead of the August recess.

Bottom found? Are we there yet?

For now, the narrative appears to be shifting from fears of further capitulation towards whether the market has finally found a durable bottom. The challenge is that sentiment is stabilising faster than demand is returning, with the improving mood reflecting a shortage of sellers rather than an abundance of buyers. On its own, that is unlikely to sustain a lasting rally. 

Bitcoin clears range ceiling, but bulls need confirmation

After gaining more than 4% and closing marginally above the $64,400 range ceiling in the previous session, BTCUSD's rebound is facing a key test, with price action oscillating just below $65,000. Caught between a fresh range breakout and sustaining gains above the 50-day SMA, Bitcoin needs a convincing move above $65,500 to validate the fresh breakout and extend gains.

However, with the RSI easing after recently recovering above neutral and price action remaining subdued, such confirmation remains elusive for now, suggesting a reduction in selling pressure rather than the start of a meaningful bullish reversal.

Notably, Bitcoin continues to hold above its 200-week moving average near $63,045, a closely watched long-term support level often associated with major market bottoms and trend transitions. While brief dips below this threshold have historically attracted buyers and preceded strong recoveries, sustained confirmation above the level remains key for the bullish case.

The next major resistance is seen near $70,500, while initial support lies at the 20-day SMA near $62,250, followed by the psychological $60,000 level.