By Linh Tran, Market Analyst at XS.com
After the recent correction toward the $103,000–$104,000 area, Bitcoin (BTCUSD) has gradually regained its upward momentum, trading around $108,000–$109,000 as global risk sentiment improves and speculative capital returns to digital assets.
The key driver behind last week’s positive sentiment was U.S. President Donald Trump’s moderate remarks regarding tariff policy toward China, which helped ease concerns over an escalating trade war — thereby supporting a rotation of capital back into risk assets, including cryptocurrencies.
While Bitcoin has seen a notable short-term correction, the long-term trend remains a different story, as the cryptocurrency’s trajectory is still heavily influenced by macroeconomic factors such as the Federal Reserve’s monetary policy, U.S. dollar strength, spot Bitcoin ETF flows, and geopolitical risks.
Following recent statements, Fed Chair Jerome Powell noted that the end of the Quantitative Tightening (QT) program “may be approaching,” though he stopped short of committing to a specific timeline for rate cuts. The 10-year U.S. Treasury yield remains above 4.0%, reflecting tight liquidity conditions that make it difficult for risk assets — including crypto — to establish a sustainable uptrend. Under these circumstances, Bitcoin is likely to consolidate within a broad range until the Fed provides clearer guidance on a shift toward monetary easing. Any hint of slowing QT or earlier-than-expected rate cuts could trigger a new wave of bullish momentum for BTC.
According to SoSoValue data, spot Bitcoin ETFs have maintained positive net monthly inflows, with nearly $4.5 billion USD in net inflows since early October, despite some short-term outflow sessions during the week. Major funds such as BlackRock’s IBIT and Fidelity’s FBTC continue to lead in holdings, indicating that institutional investors still view Bitcoin as a strategic long-term asset. This is particularly important amid tight global liquidity, as stable ETF inflows help sustain long-term demand and support Bitcoin above the key psychological level of $100,000.
As geopolitical tensions in the Middle East and Eastern Europe continue to rise — alongside a U.S. government shutdown and national debt exceeding $37 trillion — Bitcoin is increasingly being viewed as a non-sovereign reserve asset, similar to gold. This trend reflects growing skepticism about major economies’ fiscal discipline, prompting institutional investors to diversify into scarce and decentralized assets such as Bitcoin.
Despite the positive long-term outlook, a strong U.S. dollar remains a short-term headwind. The DXY index, hovering around 98, increases the opportunity cost of holding non-yielding assets like Bitcoin. Moreover, short-term capital flows in the crypto market remain sensitive to political volatility and global liquidity risks, leading to quick profit-taking during rebounds.
Overall, in my view, Bitcoin is currently in a reaccumulation phase following its short-term correction, with market sentiment stabilizing and institutional demand remaining resilient. However, to confirm a sustained bullish cycle, BTC will need a clear macro catalyst — such as a shift in Fed policy toward easing, a weaker U.S. dollar, or an improvement in global liquidity conditions.