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Bitcoin (<a href="https://coinmarketcap.com/currencies/bitcoin/" rel="noopener noreferrer nofollow">BTC</a>) benefited from a steady bid last week as the June Consumer Price Index fell 0.4% from the previous month, bringing annual inflation down to 3.5%. Falling energy prices largely drove the decline, which was the steepest monthly inflation drop since 2020.Markets read <a href="https://coinmarketcap.com/academy/article/bitcoin-clears-dollar64k-after-june-cpi-posts-biggest-monthly-drop-since-2020" rel="noopener noreferrer nofollow">cooling inflation</a> as a sign that the US Federal Reserve may delay interest rate hikes. Following the release, crypto and equity markets responded positively, but how long the bullish momentum lasts remains in question.The tit-for-tat stalemate between the US and Iran rekindled a hot war last week, sending oil prices past $85 per barrel. This potentially complicates the medium-term inflation outlook and raises the chance of a negative spillover into equity markets.On Capitol Hill, comments from Wyoming Senator Cynthia Lummis and President Trump’s July 16 meeting with a small group of senators raised hopes for progress on crypto regulation.A second week of robust capital flows across Bitcoin and Ether (<a href="https://coinmarketcap.com/currencies/ethereum/" rel="noopener noreferrer nofollow">ETH</a>) spot, futures and <a href="https://coinmarketcap.com/academy/glossary/bitcoin-etf" rel="noopener noreferrer nofollow">ETF</a> markets also improved sentiment, with new data from Swissblock heralding the return of fresh liquidity to crypto markets.Is it time for the bulls to run?The Rundown<ul><li>Bitcoin Rallies on Cool CPI Print</li><li>Strategy Hits Pause, Flagship Corporate Bid Is Gone</li><li>CLARITY Hopes Rekindled, Trump Waves the Big Stick</li><li>Bitcoin Rallies as Capital Returns to the Ecosystem: Will It Last?</li><li>What’s on the Radar?</li></ul><h2 id="bitcoin-rallies-on-cool-cpi-print-strategy-hits-pause">Bitcoin Rallies on Cool CPI Print, Strategy Hits Pause</h2>The June CPI print showing cooling inflation triggered a surge in risk-on sentiment as rate hike odds fell to 17% from 47%. Meanwhile, positive earnings expectations from banks and semiconductor manufacturers helped sustain markets’ momentum throughout the week.Bitcoin notched a 6% gain and traded as high as $65,600. Stronger capital inflows across spot, <a href="https://coinmarketcap.com/academy/glossary/futures" rel="noopener noreferrer nofollow">futures</a> and ETF markets reinforced the past two weeks’ improving sentiment.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/1a3f218911284e90ad049f1d9ac65862.png">Bitcoin spot, futures cumulative volume delta, 7-day. Source: HyblockLate June and early July dip buying has transformed into a broader market bid. Participants appear to have priced in negative newsflow, and are now focusing on Bitcoin’s alleged discount and growing bid momentum. Bitcoin’s cumulative <a href="https://coinmarketcap.com/academy/glossary/trade-volume" rel="noopener noreferrer nofollow">volume</a> delta (CVD), which measures net taker buying versus selling, showed a weekly net $997 million on the buy side.Perpetual futures continue to propel BTC’s price while spot participation lags noticeably, but inflows into Bitcoin ETFs highlight the spot bid. Between July 10 and July 15, net flows into spot Bitcoin ETFs topped $108 million, following the $425 million flushout on July 13.Bitcoin’s aggregate <a href="https://coinmarketcap.com/academy/glossary/open-interest" rel="noopener noreferrer nofollow">open interest</a> peaked on July 14 at $21.35 billion by the daily close as leverage built into the CPI-led rally. However, it unwound over the next 24 hours, reflecting orderly deleveraging. The funding rate also remained positive throughout the week, decelerating to 0.147 toward the end of the week as profitable longs exited positions and CPI-driven traders pared risk.While pushing past $65,000 and converting it to support is key for sustaining the current trend, the major positives of the week were:<ul><li>A third consecutive BTC CVD buy day.</li><li>BTC briefly traded above $65,600, entering a $163 million to $291 million short-liquidity cluster extending to $66,709. This has placed short-squeeze “fuel” within traders’ reach.</li><li>Bitcoin ETF flows printed a third consecutive net inflow day last week, confirming the institutional and retail bid despite the current oil price volatility.</li></ul><img src="https://academy-public.coinmarketcap.com/optimized-uploads/34e624ee61bf4139bca2727f02f75444.png">Bitcoin price, funding, open interest. Source: Hyblock<ul><li>Strategy (MSTR) halted its BTC buying but still raised $466.7 million via equity from July 6 to July 12. While the flagship corporate bid appears to be gone, the market has adjusted to the concept of Strategy selling BTC and dialing back new buys.</li></ul><h2 id="clarity-hopes-rekindled-trump-waves-the-big-stick">CLARITY Hopes Rekindled, Trump Waves the Big Stick</h2>US lawmakers have about four weeks to schedule, deliberate and vote on the <a href="https://coinmarketcap.com/academy/article/clarity-act-crypto-us-bill-what-happens-if-passes" rel="noopener noreferrer nofollow">CLARITY Act</a> before the August recess starts. It’s an incredibly tight timeline, but crypto advocate and Wyoming Senator Cynthia Lummis spoke publicly throughout the week about progress toward pushing the legislation closer to the finish line.On July 16, President Trump met with a group of senators to hash out the remaining hurdles to passing the CLARITY Act, including ethics concerns connected to the President’s own crypto investment activities.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/ce8bcb8b55f74adf96c5987066fccba1.png">Senator Lummis on CLARITY Act progress. Source: <a href="https://x.com/SenLummis/status/2077019696449061176?s=20" rel="noopener noreferrer nofollow">X / Senator Cynthia Lummis</a>The bill requires 60 votes to advance. The next steps involve merging the Senate Banking Committee and Senate Agriculture Committee versions, then ironing out remaining disagreements between Democrats and Republicans.<h2 id="bitcoin-rallies-as-capital-returns-to-the-ecosystem-will-it-last">Bitcoin Rallies as Capital Returns to the Ecosystem: Will It Last?</h2>Exchange and ETF weekly net flows show improving investor appetite. Onchain data suggests the market is exiting a selloff phase and entering a period of “consolidation / bullish transition.”According to market analytics provider Swissblock:<blockquote> “After June’s breakdown, Market Trend is no longer deteriorating. Instead, it is building a Consolidation/Bullish Transition, the phase where selling pressure begins to fade and markets structure stabilizes. But this is not the recovery itself, it’s the foundation a recovery needs.”
</blockquote><img src="https://academy-public.coinmarketcap.com/optimized-uploads/46105cdb57044c06917ac38b6f24f3ef.png">Bitcoin market trend data. Source: <a href="https://x.com/swissblock__/status/2077526023021707368?s=20" rel="noopener noreferrer nofollow">Swissblock / X </a>Regarding ETF flows and their impact on Bitcoin price and market sentiment, Swissblock said that “the storm has passed.”<blockquote> “The most overwhelming ETF distribution wave of this bear market has ended. As Bitcoin Risk continues easing from Capitulation Risk, Spot ETF flows have turned slightly positive again.”
</blockquote>The analysts warned that while “ETF accumulation is positive,” it has not shown sustained strength. This, they say, is a sign that “institutional conviction is not returning with full force.”<img src="https://academy-public.coinmarketcap.com/optimized-uploads/a4ea9fe10d864241830659e2425ed882.png">Risk index and BTC ETF net flows. Source: <a href="https://x.com/swissblock__/status/2074978267023417752?s=20" rel="noopener noreferrer nofollow">Swissblock / X&nbsp;</a><h2 id="what-s-on-the-radar">What’s On the Radar?</h2><ul><li>Will Bitcoin and ETH CVDs lock in a third week of positive net flows? Such an outcome would align with analysts’ view that the worst part of the bear market has passed and a lengthy consolidation phase has begun.</li><li>Will traders frontrun potential progress on the CLARITY Act and position accordingly?</li><li>The US-Iran war has escalated to new levels, oil prices are up and inflation remains a real threat to the US economy. Will equity markets roll over and how will crypto react?</li></ul>

Bitcoin Bear Phase Morphs to Consolidation as BTC, ETH Flows Flip Positive

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