Market update | August 7th, 2026

Bitcoin: the lows are probably in, the highs are not

Bitcoin’s recent recovery has been closely tied to a shift in interest-rate expectations. Since 29th July, markets have materially reduced the probability of further rate hikes this year, providing support for long-duration assets. The change appears partly linked to hopes that the conflict with Iran may move closer to resolution, alongside slightly softer US macroeconomic data.

Oil remains central to the outlook. Any easing in geopolitical tensions would reduce pressure on energy prices and inflation expectations, lowering the need for further monetary tightening. Conversely, renewed escalation would quickly reverse that support. Bitcoin continues to respond more to the implications of the conflict for inflation and rates than to the geopolitical headlines themselves.

US employment data has also softened. JOLTS figures pointed to weaker labour demand, while the anticipated increase in hiring associated with the World Cup has not materialised to the extent expected. The broader employment picture is therefore beginning to look less robust, helping reduce rate hike expectations. The payroll figures released today reinforced this view, with a significant downside miss providing a stronger case for the more dovish members of the US Federal Reserve to advocate a more accommodative policy stance. Futures markets have responded by reducing the probability of rate hikes later this year, while Bitcoin prices have reacted positively intraday highlighting how important macro data is to the asset.

Market internals are also improving. Bitcoin whales had sold approximately US$40 billion since October 2025, creating one of the largest sources of supply pressure during the current cycle. We have now seen three consecutive weeks of modest whale accumulation. This suggests that the distribution phase may finally be ending, consistent with the pattern observed at similar points in previous four-year cycles.

Fund flows are showing a similar change in sentiment. Digital asset investment products have attracted US$1.05B of inflows so far this week, which would mark a fifth consecutive positive week. This follows an eight-week period in which investors withdrew a record US$8 billion. The reversal is not yet fully decisive, but it increasingly resembles capitulation followed by early re-accumulation rather than the beginning of a more prolonged structural decline.

Our view remains that the cycle lows are probably now behind us. This does not imply an immediate return to strong upside. Bitcoin is more likely to remain range-bound over the next two to three months, potentially trading toward US$80,000 but struggling to sustain a move beyond it. A more durable advance toward US$100,000 would probably require a clearer deterioration in employment data and a more meaningful reduction in rate expectations.

At present, neither looks imminent. The Iran conflict remains highly uncertain, while the Fed has shown little appetite to signal an easing bias. The Jackson Hole symposium later this month should provide a clearer indication of the monetary policy outlook, although we do not expect an especially dovish message.

CLARITY Act faces uncertain outcome

Regulatory progress has also weakened. As of 6 August, Polymarket now assigns only a 14% probability that the CLARITY Act becomes law this year. Coindesk confirmed today that the Senate will not vote on it before the summer recess. Once lawmakers return, attention is likely to shift rapidly toward the midterm elections.

A delay would weigh most heavily on Ethereum, stablecoin-related projects and the broader token market, where statutory clarity remains more important than it is for Bitcoin. However, this appears to be a timing problem rather than a fundamental reversal in US crypto policy. Support for market structure legislation has increasingly been bipartisan, partly because stablecoin issuers represent a growing source of demand for US Treasuries.

The main political disagreement concerns ethics and whether elected officials should be able to launch and profit from their own cryptocurrencies. That debate should be separated from the broader case for credible digital asset infrastructure. Even if CLARITY slips into next year, the underlying regulatory direction remains constructive.