Bitcoin opened the past week trading in the upper $60,000s on Monday after a strong weekly close. After trading as high as $68,500 on Monday, prices slumped for the remainder of the week, particularly on Thursday following the release of two vital economic data reports: the Q2 GDP numbers and the Personal Consumption Expenditures (PCE) Index.

The GDP figure was 2.8%, beating the market expectation of 2.0% growth.

This had a bearish impact on equity markets, including tech and bitcoin, as stronger GDP figures imply a healthier economy, reducing the likelihood of the Federal Reserve lowering interest rates, a move the market has been anticipating this year.

The PCE figure also came in higher than expected, at 2.9% versus the expected 2.7%. This double whammy negatively impacted bitcoin’s short-term price direction, as a higher PCE reading suggests inflation is still running hot, further reducing the chances of aggressive rate cuts by the Fed. This news caused bitcoin to fall to as low as $63,500 on Thursday morning, down 7.29% from the start of the week.

By the end of Friday, however, bitcoin managed to recover about half of its losses, gaining 3.2% on the day to end the NYSE session at $67,900. All eyes then turned to former President Trump’s speech on bitcoin the next day, where he was to deliver a keynote address.

During his talk, Trump promised that, if elected, he would make bitcoin a strategic reserve asset of the United States. Specifically, his policy in a second term would involve maintaining the current government holdings of bitcoin as the foundation of a strategic national bitcoin stockpile.

Immediately afterward, Senator Cynthia Lummis also spoke at the conference, mentioning a bill she is drafting. This legislation would set aside the country’s existing holding of over 200,000 bitcoins and aim to increase this amount until the U.S. accumulates one million tokens, representing nearly 5% of the total supply.

During Trump’s and Lummis’ speeches, bitcoin appreciated by nearly 4% in under an hour on these promises, which were previously deemed unlikely on prediction markets such as Polymarket, where there were only 34% odds of Trump making such an announcement.

Bitcoin Monthly Timeframe Analysis

On the monthly timeframe, bitcoin remains in a bullish posture. It is trading above major key moving averages, such as the 21 and 55 EMAs (exponential moving averages, represented by the yellow and green lines in the image above), and it is trading above the monthly closing highs of the previous bull cycle in 2021, where the highest monthly close was $61,351 in October 2021.

This is despite a significant pullback to $53,800 earlier in the month, which now appears to have been a “shakeout” attempt below the critical $60,000 level.

ETF Flows Update

Spot ETF flows in the US maintained their upward trajectory, with total net assets remaining stable at $62.1 billion, tying the record from the previous week. Apart from Tuesday, all five days this past week saw positive ETF flows. Most notably, Blackrock’s IBIT ETF took in $526 million of net flows last Monday, breaking the daily inflow record of all bitcoin spot ETFs currently active.

Interestingly, spot on-chain holdings of bitcoin made another new record on Friday, with an aggregated 914,579 bitcoins held by major ETF issuers, an increase of nearly 2% from the previous week’s on-chain holdings of 897,581 bitcoins.

From a technical and regulatory perspective, the future direction of bitcoin continues to be bullish.

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