Key Takeaways
Macroeconomic factors suggest that both Bitcoin and the S&P 500 still show growth potential. The Asian market could play a decisive role in Bitcoin’s trajectory in the coming days.
Over the past week, Bitcoin [BTC] has struggled with low liquidity inflows, leading to a 10% decline since reclaiming a new all-time high on the 14th of August.
Notably, liquidity droughts like this often signal potential bearish scenarios, as investors begin offloading assets when the market reaches a seasonal climax.
However, new macroeconomic insights argue there is still a bullish case for the market, even though the risk of a reversal remains.
Macro signals remain supportive
U.S. macroeconomic indicator on Alphractal show that both Bitcoin and the S&P 500 have room to rally further in the coming days, according to the Fed Financial Stress Index (FFSI).
This index tracks market tension, high readings above 0 indicate sell-side pressure, while values below 0 reflect market calm and buying interest.
Historically, the metric has predicted significant market movements, including during the 2020 lockdown. At press time, the FFSI sat below 0, signaling room for continued growth.
Source: Alphractal
Sentiment appears to lean more in favor of Bitcoin over the S&P 500, especially given the past year’s performance, with Bitcoin up 86.2% compared to the S&P’s 15.3% per Artemis.
This suggests that if buying resumes, investors will likely channel funds into Bitcoin rather than the S&P, as their risk appetite remains strong.
Renowned crypto analyst Joao Wedson recently described this as a “calm/observation” phase for the market but warned that “price action often reacts faster than macro metrics,” leaving the asset in a grey zone.
He added,
“If the FFSI breaks and holds above 0, it would be a warning sign that the U.S. situation could destabilize and directly impact risk markets.”
Wedson cautioned that such a scenario could trigger broader economic instability in “major Asian economies” as we move into late 2025 and early 2026, potentially halting Bitcoin’s rally.
He urged investors to stay prepared to avoid being caught off guard.
Asia shows renewed strength in Bitcoin
The Asian market is showing early signs of recovery, with investors once again placing bids on Bitcoin as the Korean Premium Index reads 0.3 on CryptoQuant.
This follows an extended downtrend marked in red on the index. A sustained upward trend could spark further inflows, particularly from new investor groups.
Source: CryptoQuant
In contrast, the Coinbase Premium Index, a key market indicator, has dropped to 0.017, at press time, suggesting that U.S. investors are increasing their sell-side activity.
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