1. Market Status Summary
Since July 2025, Bitcoin (BTC) has entered a high-level consolidation phase after reaching an all-time high of approximately $123,000. The price has primarily fluctuated within the core range of $117,000 to $123,000. Recently, the price found support at the lower end of the range, indicating that the market is in a state of balance between bullish and bearish forces, waiting for new catalysts after digesting the previous large gains.
2. Core Driver Analysis
1 Macroeconomic Aspect: The Struggle between Fiscal Deficit and Monetary Policy The key contradiction in the current market is: in the short term, higher-than-expected Personal Consumption Expenditures (PCE) inflation data has delayed the Federal Reserve's rate cut expectations, putting pressure on risk assets, including Bitcoin. However, from a long-term perspective, the continuously expanding debt ceiling and fiscal deficit issues in the U.S. have instead reinforced Bitcoin's macro narrative as a hedge against sovereign credit risk and a long-term store of value.
2 Regulatory Aspect: Legislative Clarity Lays a Long-term Foundation Recent key legislations passed in the U.S. (such as the GENIUS Act and the CLARITY Act) have provided unprecedented regulatory clarity for the crypto market. This move is widely interpreted by the market as a decisive 'de-risking' event, clearing key obstacles for traditional financial institutions to enter the market on a large scale. Although it triggered some 'buy the rumor, sell the news' profit-taking in the short term, its long-term positive impact is profound.
3 Internal Market Dynamics: Leverage Clean-up and Sentiment Reset The previous price surge to $123,000 was accompanied by large-scale short liquidations, demonstrating the driving effect of leverage. Currently, during the consolidation phase, the leverage in the derivatives market has significantly decreased, and market sentiment has returned from 'extreme greed' to neutral. Options market data show that key points of contention are clear, while on-chain data indicates that long-term holders are still continuously accumulating within the current price range, solidifying the market's foundation.
3. Conclusion and Outlook
• Conclusion: Bitcoin has confirmed its status as a macro-driven asset. The current price consolidation is a healthy manifestation of the interplay between short-term monetary policy uncertainty and long-term structural benefits (clarification of regulations, demand for fiscal hedging).
• Outlook: In the short term, the market may continue to experience range-bound fluctuations, closely monitoring the Federal Reserve's guidance on future interest rate paths. In the long term, with the formal implementation of regulatory frameworks and the continued net inflow of institutional funds (such as ETFs), the structural foundation for Bitcoin's upward breakout has become more solid, making the future market still worth looking forward to.