Bitcoin stuck in the $65,000 range: three key factors holding back the rally
Bitcoin has returned to the $65,000 zone, but attempts to consolidate above this level have so far been unsuccessful. On Wednesday, the rate reached $65,975 — a high since early June, but it failed to break through the psychological barrier of $66,000. What is preventing the first cryptocurrency from transitioning to full-fledged growth?
ETF Inflows: Positive, but Insufficient
On Tuesday, U.S. spot Bitcoin ETFs recorded net inflows of $203.2 million. This marks the sixth consecutive day of positive momentum. However, against the backdrop of total outflows of $6.9 billion that investors withdrew from funds in May and June, current volumes appear modest. A more powerful and sustained influx of institutional capital is needed to confidently break through the $60,000–$70,000 range.
Inflation and Fed Policy: The Main Brake
The primary pressure on Bitcoin comes from the macroeconomic environment. The U.S. Federal Reserve has directly linked inflationary pressure to the investment boom in artificial intelligence (AI). Minutes from the Fed's June meeting indicate that rising demand for data centers, electricity, and AI equipment is driving up prices. Fed Governor Kevin Warsh noted that investments in high-tech equipment have grown by nearly 25% over the year, and the regulator is closely monitoring their impact on inflation and employment.
Giants like Alphabet and Microsoft plan capital expenditures in the hundreds of billions of dollars by 2026. Nvidia reported a 92% year-over-year increase in data center revenue. This demand for resources keeps inflation at elevated levels, preventing the Fed from lowering interest rates. In June, consumer prices remained 3.5% higher than the previous year, while producer prices rose by 5.5% — both indicators are too high for a rapid policy easing.
Competition for Capital: Bonds and the Dollar
High bond yields and a strong dollar are siphoning liquidity from risk assets, including cryptocurrencies. The yield on two-year U.S. Treasuries rose to 4.301% — a high in over a year, while ten-year bonds approached 4.66%. This makes government securities and cash more attractive compared to volatile Bitcoin. The strengthening dollar, driven by expectations of further rate hikes and geopolitical tensions in the Middle East, also weighs on the crypto market.
Stocks of AI companies and semiconductor firms have gained about 69% in 2026, while Bitcoin remains down roughly 25% year-to-date. Capital is flowing into sectors with more obvious growth drivers, leaving Bitcoin in a sideways trend.
My view: Bitcoin is caught between positive ETF momentum and a powerful macroeconomic cycle fueled by AI. Until the Fed begins a rate-cutting cycle and bond yields decline, a full-fledged rally should not be expected. The key moment is the Fed meeting on July 29, which could set the direction for the entire risk asset market in the second half of the year.