Bitcoin traded lower on Sunday as geopolitical risks resurfaced after US Vice President JD Vance said peace talks involving Iran in Pakistan had failed.
However, beyond the macro noise, crypto-specific drivers continued to point to a potential move towards $88,000 and higher, although results remain dependent on how broader risk conditions develop.
Bullish currents
Beginning with market flows, sentiment has remained constructive. Strategy, the world’s largest listed bitcoin holder, said it bought $330 million worth of bitcoin last week, lifting its total holdings to 766,970 BTC. Some estimates suggest that the Strategy’s STRC-related activity has added about 8,000 bitcoin so far this week.
If that wasn’t enough, U.S.-listed spot bitcoin ETFs — broadly seen as a proxy for institutional demand — recorded net inflows of $787 million this week, according to data from SoSoValue. It is the strongest weekly approach since the beginning of March. Since then, these funds have attracted nearly $2 billion in cumulative investor capital.
“It’s not yet massive flows in absolute terms, but the direction and persistence matter: with MicroStrategy buying and ETFs absorbing supply, downside risk is structurally limited as long as these flows and the technical picture hold,” Markus Thielen, founder of 10x Research, said in a note to clients on Sunday.
Thielen’s base case is now a rally towards $88,000, driven not only by flows but also by oversold signals from technical indicators such as stochastic oscillators, along with improving risk appetite across related markets, including mining stocks and broader stocks.
Publicly traded miners such as TeraWulf (WULF), Bitdeer Technologies (BITDEER) and IREN Limited have risen between 10% and 30% this month. Broader U.S. stocks are also up, with the S&P 500 up 4%, while AI heavyweights such as Nvidia gained about 6%.
“The recent performance of bitcoin miners, particularly those pivoting to AI hosting, signals that the market is rotating back to the AI capex and growth theme, with Iran-related risks increasingly looking like a sideshow,” Thielen said.
“Together, this moves our base case strongly to the upside with $88,000 as our primary near-term target. The confluence is rare: technicals are constructive, flows are positive and expanding, and the market is showing a clear willingness to see through geopolitical noise,” he noted,
Other widely tracked demand indicators are also flashing supportive signals. For example, the Coinbase Premium Index – which measures the price difference between bitcoin on Nasdaq-listed Coinbase and offshore exchange Binance – rose to 0.0586%, its highest level since October, according to data from Coinglass.
The move suggests relatively stronger buying pressure from US investors compared to offshore markets, a dynamic often associated with bullish phases in crypto markets.
Act of Clarity
Matt Mena, senior crypto research strategist at 21Shares, said the potential passage of the Clarity Act later this quarter provides a “well-defined structural path” for further upside in crypto markets. The legislation, which aims to establish clearer jurisdictional boundaries between the SEC and CFTC and to define when a digital asset is a security or a commodity, is widely viewed as an important regulatory milestone that could reduce lingering uncertainty for bitcoin and the broader crypto sector.
Polymarket traders are currently pricing in a 65% probability that the Clarity Act will be signed into law this year. While the bill passed the House in July 2025, it is currently stalled in the Senate.
“With the potential passage of the Clarity Act later this quarter, the structural path for a significant expansion is well defined. Recovery of $73,000 clears the runway for a $75,000 test, which would likely provide the firepower for a rapid move through the $80,000 toward $90,000 corridor. Combined with a $00 miles backrop, a neutral 0 miles backrop of Q2 remains a possible outcome,” he said in a e-mail.
Inflation and on-chain dynamics
On the macro front, the latest inflation data came in largely mixed, but leaned softer on underlying pressures. The Consumer Price Index (CPI) rose 0.9% month-on-month, lifting the annual rate to 3.3%, mainly driven by a 10% jump in energy prices.
However, core CPI – which strips out food and energy – rose just 0.2% month-on-month and 2.6% year-on-year, both 0.1 percentage points below expectations. The print suggests that underlying price pressures remain contained, even as headline inflation is distorted by volatile energy costs.
For markets, that distinction is important. If inflation continues to ease below the surface, the Federal Reserve may see through temporary energy-driven spikes and maintain more accommodative policy later this year. A stable or more accommodating price path typically supports liquidity conditions, which tend to benefit risk assets such as stocks and cryptocurrencies, including bitcoin.
Finally, Vikram Subburaj, managing director of the India-based FIU-registered Giottus exchange, pointed to supply dynamics which suggest prices are unlikely to face any resistance between $70,000 and $80,000.
“Supply distribution data indicates that only about 1 percent of circulating Bitcoin is between $72,000 and $80,000. This suggests that a sustained break above current resistance could lead to relatively faster price discovery due to thinner overhead supply,” he said in an email.
Taken together, these factors suggest that while geopolitical risks continue to dominate headlines, the underlying crypto market structure remains supportive of potential upside in bitcoin – assuming broader risk conditions do not materially worsen.
