The spot ETF has deeply embedded Bitcoin into the macro trading framework, with U.S. Treasury yields and ETF fund flows becoming core variables for judging its short-term direction.

Written by: Blockchain Knight

The Bitcoin market is undergoing a concentrated stress test from the macroeconomy. After six consecutive weeks of net inflows, the ETF recorded over $1 billion in net outflows last week, with total assets under management in crypto ETPs dropping to $157 billion.

CoinShares directly attributed this round of outflows to Iran-related risk aversion, while Bitfinex pointed out that Bitcoin faces a triple pressure from weakened ETF demand, rising oil prices, and prolonged high interest rates.

The structure of the outflows shows internal differentiation. U.S. investors contributed $1.14 billion in withdrawals, but Switzerland, Germany, Canada, and other regions still saw net inflows; XRP had a global inflow of $67.6 million, and Solana saw an inflow of $55.1 million, with their perpetual contract funding rates briefly turning positive during the downward period.

Sygnum Bank strategists believe that the profit-taking after Bitcoin's surge in April also amplified the outflow scale, representing reasonable position management, while the legislative progress of the CLARITY Act marginally provides a constructive regulatory background.

The core trigger for the outflows is interest rate repricing. The situation in Iran pushed Brent crude oil to surge beyond $110, reigniting inflation expectations. The 10-year U.S. Treasury yield rose to 4.67% (a new high since January 2025).

The CME FedWatch Tool shows that the probability of a rate hike in December is as high as 54.1%, with the probability of a rate cut only 1.5%, indicating a market shift from waiting for easing to responding to tightening.

The high yield and strong dollar have elevated the holding costs of non-yielding assets, turning Bitcoin ETF demand from stable inflows into a stress test.

Though the Chicago Fed Financial Conditions Index is at -0.524, indicating overall looseness, the marginal tightening in the Treasury market has triggered ETF holders' risk nerves. Bitcoin is becoming a thermometer for macro sentiment around the $77,000 mark.

At the same time, crowded trades on Wall Street are amplifying vulnerabilities. A Bank of America fund manager survey shows bond allocations have dropped to a net underweight of 44%, while equity overweight has risen to a net 50%, with 40% of respondents viewing a second wave of inflation as the biggest tail risk.

If inflation unexpectedly cools, bond short covering could rapidly lower yields; if inflation persists, crowded liquidations could also push yields higher, exacerbating the pressure on risk assets. Bitcoin, as a 24/7 traded asset with no cash flow, is usually the first to be cut.

From a technical perspective, Glassnode, based on on-chain costs, considers $76,900 as immediate support, while Bitfinex defines the short-term range between $72,000 and $80,000.

The 30-day net position change on-chain has only recovered to $2.8 billion per month, far below the tens of billions required for a strong bull market, indicating that institutional confidence can only be maintained rather than expanded.

In an optimistic scenario, geopolitical cooling and falling oil prices could reduce rate hike expectations, leading the 10-year yield to fall back to 4.20%–4.40%, with crowded shorts' liquidations releasing easing conditions, allowing ETF fund inflows to help Bitcoin reclaim $80,000.

In a pessimistic scenario, sticky inflation could push yields above 4.73%, with real interest rates continuing to rise, and if support at $76,000 fails, the price could slide toward $70,000 or even down to $58,000 in a Citigroup recession scenario.

In the long term, the expansion of debt, tapering of central bank bond purchases, and term premium issues still support Bitcoin's narrative of scarcity value.

However, in the short term, the spot ETF has deeply embedded Bitcoin into the macro trading framework, with U.S. Treasury yields and ETF fund flows becoming core variables for judging its short-term direction.