Bitcoin Has Found Buyers

Welcome to Ecoinometrics’ Friday edition.

Each week, we analyze the three most critical market signals impacting Bitcoin and macro assets, delivering institutional-grade insights through data-driven charts and analysis.

Today we’ll cover:

1. Bitcoin Has Found Buyers

2. Bitcoin Recoveries Take Time

3. The Era Of Falling Rates Is Over

Bear markets are easy to recognize when prices are falling every week. Recoveries are much harder. Markets become less “negative” long before they become true recovery stories. That leaves investors with a difficult job: deciding whether the recent improvement is simply noise or the beginning of a more durable change. The real clues usually come from how demand is evolving, how previous recoveries unfolded and whether the broader macro environment is becoming more or less supportive.

In case you missed it, here are the other topics we covered this week:

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Bitcoin has found buyers again. After months of persistent outflows, July brought a clear change in tone, with ETF investors stepping back in and helping stabilize the market around the mid-$60k range.

So clearly demand has improve. Buit are we looking at the beginning of another sustained accumulation phase?

That’s where some perspective helps. During last year’s bull market, ETF holdings didn’t just bounce for a few weeks, they climbed almost relentlessly for months. That steady stream of buying kept absorbing supply even as Bitcoin pushed to new highs.

We’re not seeing that kind of demand yet. ETF holdings have stopped falling and even recovered part of the recent decline, but the broader trend hasn’t turned higher. Investors are buying again, just not with the consistency that can fuel a breakout.

For now, the evidence points to stabilization rather than a new uptrend. That’s a meaningful improvement from where we were six weeks ago, but it isn’t the same thing as a recovery.

One of the easiest mistakes investors make is assuming that once the bottom is in, the recovery should happen quickly. Bitcoin’s own history suggests otherwise.

The chart below compares the size of every major Bitcoin drawdown since 2014 with the time it took for the price to fully recover. The pattern is consistent: the deeper the drawdown, the longer investors have had to wait before Bitcoin reclaimed its previous high.

The current bear market has reached a maximum drawdown of roughly 54% and has now lasted around 300 days. If that low ultimately proves to be the bottom, history still points to a long recovery process. Drawdowns of this magnitude have typically taken around a year and a half from the initial decline to regain their previous peak.

That doesn’t tell us where Bitcoin will trade over the next few months. What it does tell us is that patience will be necessary if you buy at this point. Even after sentiment turns, building a recovery has usually taken much longer than investors expected.

For almost forty years, investors could rely on one powerful tailwind: long-term interest rates kept falling. Every major crisis eventually pushed yields lower, making bonds more expensive, borrowing cheaper and risk assets increasingly attractive.

Bitcoin has never experienced anything else. It was born near the end of that long decline, when capital was abundant and investors were constantly searching for higher returns.

That backdrop has changed. The 30-year Treasury yield is now above 5.2% for the first time since before the Great Financial Crisis. Whether rates continue climbing from here is still uncertain but the decades-long trend toward ever-lower yields has already been broken.

So high-quality government bonds are once again offering investors a meaningful return. Capital that might previously have flowed into technology stocks, private markets or Bitcoin now has another place to earn an attractive yield with far less risk.

Bitcoin can still perform well in that environment. But investors should recognize that it is competing for capital under very different conditions than those that helped shape its first 18 years of existence.

That’s it for today. Thanks for reading.

Cheers,

Nick

P.S. Every week, our team conducts extensive research analyzing market data, tracking emerging trends, and creating professional-grade charts and analysis.

Our mission: Deliver actionable macro and Bitcoin insights that help institutional investors and financial advisors make better-informed decisions.

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