Bitcoin rebounded this week after softer-than-expected US inflation data lifted sentiment across financial markets, with investors now turning their attention to developments in Washington that could shape the future regulatory landscape for digital assets, according to Nagham Hassan, Market Analyst at eToro.
“Bitcoin has recovered from Monday’s losses after cooler US inflation figures improved risk appetite, allowing the cryptocurrency to climb back towards the $65,000 level. Lower inflation has eased pressure on financial markets and revived expectations that the macro environment could become more supportive for risk assets if the trend continues,” said Hassan.
Attention is now shifting to the upcoming US House Financial Services subcommittee hearing on the Clarity Act, scheduled for 17 July. The proposed legislation aims to establish clearer regulatory responsibilities between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) for digital assets.
“Markets have been expecting greater regulatory clarity in the US to support broader institutional participation in crypto. While the Clarity Act represents an important step in that direction, uncertainty around its progress could influence investor sentiment in the weeks ahead,” Hassan added.
Despite bitcoin’s recent recovery, several indicators suggest the market remains cautious. On-chain valuation metrics continue to sit below levels typically associated with market peaks, indicating that long-term holders are holding significantly smaller unrealised gains than earlier this year.
“Historically, these valuation levels have often appeared during periods of market consolidation rather than excessive optimism. While they can provide a constructive backdrop for future gains, stronger demand will ultimately determine whether prices can build sustained upward momentum,” Hassan said.
Institutional flows remain one of the key areas to watch. Spot bitcoin ETFs have continued to record net outflows through much of 2026, reducing one of the strongest sources of buying pressure seen earlier in the cycle.
“ETF demand remains softer than many investors had hoped, and until institutional inflows return consistently, bitcoin may continue to trade within a relatively broad range despite improving macro conditions,” Hassan noted.
Looking ahead, Hassan believes both macroeconomic data and policy developments will determine bitcoin’s next major move.
“The softer inflation reading has provided welcome relief for markets, but investors will now be watching whether that trend continues alongside any meaningful progress on US crypto regulation. At the same time, geopolitical tensions and energy prices remain important risks that could quickly shift market sentiment. For now, bitcoin remains a market waiting for its next major catalyst,” Hassan concluded.
