What were the main drivers of Bitcoin price action this week?

The article explains that Bitcoin’s moves were primarily driven by macro factors such as changing interest‑rate expectations, dollar liquidity, and risk sentiment across equities and credit. It also notes the impact of derivatives positioning and spot flows on short‑term volatility and key support and resistance levels.

How does Onramp interpret current Bitcoin on-chain and flow data?

Onramp interprets on‑chain and flow data by tracking exchange balances, realized profits and losses, and derivatives funding to gauge whether investors are in risk‑on or risk‑off mode. The article summarizes whether flows skewed toward accumulation or distribution this week and how that aligns with broader macro signals.

What macro trends are most important for Bitcoin in this roundup?

The roundup emphasizes trends in interest rates, inflation expectations, and central bank liquidity as the most important macro drivers for Bitcoin. It discusses how shifts in bond yields, dollar strength, and equity performance influenced BTC’s correlation to traditional assets and shaped the week’s trading range.

Does the article suggest a bullish or bearish short-term outlook for Bitcoin?

The article outlines a conditional outlook rather than a simple bullish or bearish call. Onramp highlights specific price levels and macro triggers that could tilt the balance either way, explaining what would confirm further upside, what might signal renewed downside, and how traders are currently positioned around those scenarios.

How can investors use Onramp’s weekly Bitcoin roundup?

Investors can use Onramp’s weekly roundup to contextualize Bitcoin’s price within macro trends, understand how flows and positioning are evolving, and identify key levels to watch. The article is designed to complement, not replace, individual research and risk management when making allocation or trading decisions.

Roundup: Bond Reversal & BTC Dominance

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Roundup: Bond Reversal & BTC Dominance – Onramp

Two patterns in the above chart illustrate a growing reliance on debt that is negatively impacting Treasury markets.

First, the debt ceiling impasse from January 19th, 2023 to June 2nd temporarily stalled the rise in debt, remedied only after a congressional vote to ‘raise’ the debt ceiling. Much has been written about the role that the aggressive Fed hiking campaign had on the March 2023 bank failure as the heavy slug of U.S. treasuries that banks hold fell faster than liabilities.

Less discussed is the overlap of the bank failures and the 2023 debt ceiling standoff. Remember that Janet Yellen was searching for all manner of cash to pay government obligations, even suspending payments to Federal Employee retirement systems…so cash was dear, was Yellen’s message. The subsequent rapid rise in debt showed the government wasted no time in playing catch up.

Second, at the start of every fiscal year in October, the U.S. Federal debt jumps as we see highlighted by the three arrows representing the start of FYs 2022, 2023 and 2024, which was last week.

The sustained commitment to grow debt (+7.2% YoY) more than GDP (+5.2% YoY) based on data through Q2 2024 is negatively impacting markets, as we see in Tuesday’s outsized spike in Treasury volatility noted above. The result is a growing deficit that will exceed 7% (or over $2 trillion on an annualized basis) in short course.

Market Scorecard

The knock-on effects of the U.S. growing pile of debt shared above is NOT all negative.

One beneficiary has been bitcoin (BTC), which enjoys a codified cap on supply protected by the most secure and decentralized computer network in the world. These qualities likely contribute to BTC being the only asset to post positive returns across all four time frames detailed below, with the highest YTD and trailing 1-year returns of 44.8% and 123.6%, respectively.

Geopolitical and central bank actions played a big part in recent prices moves, including:

Oil rising +4.8% on the week, +7.7% over the past month on escalation in the Middle East
Bonds falling as the Fed is unlikely to delivery on its promise to cut rates
The CSI 300 holding onto its +23.9% 1-month gain after an epic series of dovish actions to support banks

Network Effects

Bitcoin’s integrity may be the driving force behind its growing dominance across the digital asset ecosystem.

As the below graph from the Onramp Terminal illustrates, both bitcoin’s price and its dominance over the entire $2.2 trillion digital asset ecosystem have risen since the December 2022 lows.

For a network effect to take hold, it has to survive, compound its benefits over time, and no protocol has done that better or longer than the bitcoin network, something the market is slowly appreciating as measured by BTC’s growing dominance.

A Failed Network

On Monday, U.S. Bankruptcy court Judge John Dorsey approved the FTX bankruptcy plan which will return “100% of bankruptcy claim amounts” according to John J. Ray III, CEO and Chief Restructuring Officer of FTX. Mr. Ray first came on the FTX scene as the Judge who signed the November 11th, 2022 bankruptcy filing, commenting on the lack of credible record keeping and control at FTX.

But in less than two years the courts are ready to distribute between $14.7 and $16.5 billion dollars, with Monday’s approval being, in the words of Mr. Ray, a “significant milestone” for creditors.

We see the resolution of the FTX estate as a significant milestone for another reason and a potential catalyst for BNY Mellon being granted a waiver from the SAB custody restriction.

In John J. Ray III’s own words, “Today’s achievement is only possible because of the experience and tireless work of the team of professionals supporting this case, who have recovered billions of dollars by rebuilding FTX’s books from the ground up and from there marshaling assets from around the globe. It also reflects the strong collaboration we have had with governments and agencies from around the world that share our goal of mitigating the wrongdoings of the FTX insiders. Looking ahead, we are poised to return 100% of bankruptcy claim amounts plus interest for non-governmental creditors through what will be the largest and most complex bankruptcy estate asset distribution in history.”

The courts and the U.S. government learned a great deal about the inner workings of a digital asset exchange and are now able to make distributions to creditors across more than 200 jurisdictions.

This decision comes from a Judge with over 30 years of bankruptcy and restructuring experience that includes Enron. One claim for issuing SAB 121 in March 2022 was that there was NOT enough bankruptcy precedent. In addition to FTX, there are others, but we believe FTX is the lynchpin for legal precedence given its complexity and the successful resolution across regions.

One note to current bitcoin holders: the payout to creditors is 100% of their claim in USD at the time of the filing, November 11th, 2022, when BTC was trading around $16,000. A reminder that custody remains an integral component to your bitcoin investment.

Roundup: Bond Reversal & BTC Dominance

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