Bitcoin traded lower on Sunday as geopolitical risks resurfaced after US Vice President JD Vance said peace talks involving Iran held in Pakistan had failed.
But beyond the macro noise, crypto-specific factors continued to point to a potential move toward $88,000 and above, although outcomes remain dependent on evolving broader risk conditions.
Bullish flows
Starting with market flows, sentiment remained constructive. Strategy, the world’s largest publicly traded bitcoin holder, said it purchased $330 million worth of bitcoin last week, bringing its total holding to 766,970 BTC. Some estimates suggest that Strategy’s STRC-related activity has added around 8,000 bitcoins so far this week.
If that wasn’t enough, U.S.-listed spot Bitcoin ETFs — widely considered a proxy for institutional demand — saw net inflows of $787 million this week, according to SoSoValue data. This is the largest weekly influx since the beginning of March. Since then, these funds have attracted nearly $2 billion in cumulative capital from investors.
“These are not massive flows yet in absolute terms, but direction and persistence matter: with MicroStrategy purchases and ETFs absorbing supply, downside risk is structurally capped as long as these flows and the technical situation hold,” Markus Thielen, founder of 10x Research, said in a note to clients on Sunday.
Thielen’s base case now is a rally toward $88,000, driven not only by flows but also by oversold signals from technical indicators such as stochastic oscillators, as well as improving risk appetite in related markets, including mining stocks and broader equities.
Publicly traded mining companies such as TeraWulf (WULF), Bitdeer Technologies (BITDEER), and IREN Limited have climbed between 10% and 30% this month. U.S. stocks as a whole also rebounded, with the S&P 500 rising 4%, while AI heavyweights such as Nvidia gained around 6%.
“The recent performance of Bitcoin miners, particularly those moving into hosting AI, signals that the market is returning to the theme of AI investments and growth, with Iran risk looking more and more like a sideshow,” Thielen said.
“Overall, this moves our base case firmly to the upside, with $88,000 as the primary near-term target. The confluence is rare: technicals are constructive, flows are positive and widening, and the market demonstrates a clear willingness to look beyond the geopolitical noise,” he noted,
Other widely followed demand indicators are also giving signals of support. For example, the Coinbase Premium Index – which measures the price gap between bitcoin on Nasdaq-listed Coinbase and offshore exchange Binance – rose to 0.0586%, its highest level since October, according to Coinglass data.
The move suggests relatively stronger buying pressure from U.S. investors compared to offshore markets, a dynamic often associated with bull 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 define when a digital asset is a security or commodity, is widely seen as a key regulatory step that could reduce long-standing uncertainty for bitcoin and the broader crypto sector.
Polymarket traders currently give a 65% chance that the Clarity Act will be enacted this year. Although the bill passed the House of Representatives 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 significant expansion is well defined. Reclaiming $73,000 paves the way for a test of $75,000, which would likely provide the firepower needed to quickly move from $80,000 to $90,000. Combined with a neutral inflation backdrop, a cap of $100,000 by the end of the second quarter remains a possible outcome,” he said in an email.
Inflation and on-chain dynamics
On the macroeconomic front, recent inflation data has been mixed overall, but has been more subdued due to underlying pressures. The consumer price index (CPI) rose 0.9% month-on-month, bringing the annual rate to 3.3%, largely driven by a 10% rise in energy prices.
However, core CPI – which excludes food and energy – rose just 0.2% on the month and 2.6% year on year, both 0.1 percentage points below expectations. The report suggests that underlying price pressures remain contained even as headline inflation is distorted by volatile energy costs.
For markets, this distinction is important. If inflation continues to moderate below the surface, the Federal Reserve may be able to ignore temporary energy-related spikes and maintain more flexible policy later this year. A stable or more accommodative rate trajectory generally supports liquidity conditions, which tends to benefit risky assets such as stocks and cryptocurrencies, including bitcoin.
Finally, Vikram Subburaj, CEO of the India-based FIU-registered Giottus exchange, highlighted the supply dynamics that suggest prices are unlikely to face resistance between $70,000 and $80,000.
“Supply distribution data indicates that only about 1% of Bitcoin in circulation is between $72,000 and $80,000. This suggests that a sustained breakout above current resistance could lead to relatively faster price discovery due to lower supply,” he said in an email.
Taken together, these factors suggest that even as geopolitical risks continue to dominate headlines, the underlying structure of the crypto market remains supportive of bitcoin’s potential upside, assuming broader risk conditions do not materially deteriorate.
