Bitcoin Holds Firm at $119K as ETF Inflows and Global Liquidity Signal Imminent Breakout

Bitcoin (BTC) is holding steady around the $119,000 mark after a two-week consolidation phase between $116,000 and $120,000, following its all-time high of $123,218 on July 14. This price action suggests cautious optimism, with traders preparing for a potential volatility spike driven by macroeconomic events and increasing institutional demand.

A key bullish indicator is the sustained inflow into US-listed spot Bitcoin ETFs, which saw $157.02 million in net additions on Monday—marking the third consecutive day of inflows. Institutional interest has also been resilient in the face of recent selling pressure.

A K33 report highlighted how the market absorbed a massive 80,000 BTC over-the-counter sale by Galaxy Digital without collapsing, thanks to significant accumulation by treasury and ETF entities throughout July.

Low volatility is currently the norm, with Bitcoin’s 30-day volatility dropping to 1.34%, its lowest level since June 2024. However, upcoming data releases, including U.S. employment reports, GDP figures, the Federal Reserve’s interest rate decision, and President Trump’s trade policy announcements—are expected to jolt the markets.

Analysts warn this could trigger liquidation cascades, especially in leveraged altcoin positions, though Bitcoin’s solid foundation suggests a higher probability of upward continuation.

M2 Liquidity Boom Positions Bitcoin for Explosive Upside

Beyond ETF inflows and technical resilience, Bitcoin is benefiting from a massive macro tailwind: a surge in global M2 money supply, which has now hit a record $96 trillion.

M2 includes cash, checking deposits, and near-money assets and serves as a key indicator of global liquidity. When M2 rises, excess capital often seeks refuge in non-inflationary stores of value, historically gold and real estate, and now increasingly, Bitcoin.

Bitcoin’s design, a capped supply of 21 million coins and a predictable issuance rate, makes it uniquely suited for environments of loose monetary policy.

In past cycles, like after the 2020 stimulus or the 2017 bull run, surging M2 coincided with explosive BTC price rallies.With central banks expected to shift toward easing in late 2025, Bitcoin could follow a similar trajectory.

Moreover, on-chain data supports this thesis. Exchange outflows are increasing, long-term holders are growing, and the MVRV Z-score, a metric assessing market tops and bottoms, is rising. These indicators reflect growing investor conviction and decreasing BTC availability on exchanges, creating a perfect storm for a potential supply shock.

Regulatory Clarity and Institutional Demand Reshape Bitcoin’s Trajectory

Recent regulatory advances, such as the GENIUS Act, which enforces strict guidelines for stablecoin issuers, and the pending CLARITY and Anti-CBDC acts, have introduced long-sought legal clarity to U.S. crypto markets. These moves are helping transition Bitcoin from a speculative retail asset to a globally recognized macro store of value.

Simultaneously, the U.S. SEC’s delay on several key ETF proposals, including Truth Social’s Bitcoin ETF, Grayscale’s Solana Trust, and Canary Capital’s Litecoin ETF, hints at a flood of institutional products waiting on the sidelines. Approval of these ETFs could significantly expand investor access and push capital inflows even higher.

Short-term Bitcoin holders may be showing only 13% in unrealized profits, down from historical bull market peaks of 150–230%, but this signals strong hands rather than waning confidence.

As speculative fervor gives way to strategic accumulation, Bitcoin’s price action is increasingly dictated by long-term fundamentals and macroeconomic trends rather than hype cycles.

Bottom Line

With global liquidity on the rise, regulatory frameworks solidifying, and institutional demand outpacing supply, Bitcoin is positioned for a potentially historic breakout. The current consolidation phase near $119,000 may prove to be the calm before the storm, as macro tailwinds and on-chain data align for a bullish move in the second half of 2025.