Bitcoin Stabilizes Above $113,600 as Macro Shifts Fuel Recovery

Bitcoin spent last week trading below the crucial short-term holders’ cost basis of $113,600, which hovers around the 0.85 quantile level, indicating signs of market fatigue and fading momentum. However, the market turned for the better over the weekend as U.S.-China tariff discussions progressed and BTC successfully reclaimed those resistance levels. The current trading position above $114,400 represents a significant technical achievement, but maintaining this level remains essential for sustaining a bullish trajectory.

The STH cost basis at $113,600 serves as the critical threshold for BTC to establish a shift in market structure from defensive to constructive. Market participants are closely watching this level, as historical patterns suggest persistent weakness below the STH cost basis has indicated structural weakness in the past and often preceded deeper corrections. According to Bitfinex analysis, failure to maintain this support could trigger a decline toward the 0.75 quantile, now located around $97,500, which would be consistent with prior cycle patterns.

While the potential decline to $97,500 might appear concerning, analysts note the silver lining that such a move would mark the exhaustion of selling pressure, providing the foundation for the next uptrend. This level could serve as the low of the current consolidation phase, setting the stage for a more sustainable recovery. The market’s ability to hold above $113,600 will determine whether Bitcoin can avoid this deeper correction and maintain its current stabilization trajectory.

As the cryptocurrency market prepares for its next move, changes in the broader macroeconomic landscape are creating favorable conditions for digital assets. According to the Bitfinex Alpha report, volatility in traditional asset classes, including oil and fiat currencies, could help stabilize the crypto market and drive positive price movement in the coming weeks. The current surge in oil prices and the weakening of currencies like the Japanese yen are prompting investors to reassess their exposures to risk assets.

These developments, coupled with ongoing geopolitical tensions, have accelerated capital rotation toward alternative investments. Institutional traders are now evaluating their positions in bonds and equities and are increasingly leaning toward cryptocurrencies as a hedge against traditional market volatility. The United States and China’s progressing tariff discussions have contributed to this shifting landscape, creating an environment where digital assets like Bitcoin are becoming more attractive to capital seeking diversification.

The absorption of capital rotation into cryptocurrency markets represents a significant shift in global liquidity flows. As traditional markets experience increased uncertainty, cryptocurrencies are positioned to benefit from the redistribution of institutional capital. This macroeconomic backdrop provides the potential catalyst for Bitcoin’s next rally, with the Bitfinex analysis suggesting that these liquidity shifts could drive sustained positive momentum in the crypto sector.

The current market structure presents a delicate balance between technical support levels and macroeconomic influences. Bitcoin’s ability to maintain its position above the STH cost basis will be the determining factor in whether the market can transition from its defensive posture to a more constructive phase. The $113,600 level serves as both a technical and psychological barrier that could define Bitcoin’s medium-term direction.

Historical cycle patterns provide important context for understanding potential market movements. The consistency of these patterns suggests that even if Bitcoin experiences a decline to the $97,500 support level, this would represent a normal consolidation phase within broader market cycles. Such a move would align with historical precedents where temporary setbacks ultimately gave way to renewed bullish momentum once selling pressure exhausted itself.

The convergence of technical factors and macroeconomic conditions creates a compelling narrative for Bitcoin’s future trajectory. While short-term volatility may persist, the underlying fundamentals of capital rotation from traditional assets to cryptocurrencies, combined with Bitcoin’s demonstrated resilience, suggest that the foundation for the next significant uptrend is being established. Market participants will be watching both the technical levels and macroeconomic developments closely to gauge the timing and strength of Bitcoin’s next major move.