Crypto enters the week on a softer footing, with Bitcoin trading just above $93,000 and Ethereum hovering around $3,180, as markets continue to weigh improving liquidity conditions against still-fragile risk appetite. Price action remains hesitant following last week’s volatility, but there are signs beneath the surface that capital is gradually re-engaging, even if conviction is not yet decisive.
From a macro perspective, attention remains firmly on liquidity rather than rates. While policy rates across major economies are now closer to neutral, central banks are increasingly focused on ensuring smooth functioning in funding markets. In the US, reserve management operations continue to add incremental liquidity to the system, easing short-term funding pressures without the fanfare of formal quantitative easing. Historically, this kind of backdrop has been constructive for risk assets, but it tends to support markets unevenly rather than driving broad, indiscriminate rallies.
That selectivity is still evident across global markets. Equity investors remain cautious around the most crowded growth themes, particularly AI-linked names where valuations, funding needs, and balance-sheet leverage are under closer scrutiny. Credit markets are reflecting a similar mindset, with hedging activity elevated and investors more focused on downside protection than upside participation. For crypto, this matters because it continues to trade as part of the high-beta end of the global risk spectrum. When investors are selective rather than expansive in their risk-taking, price recoveries tend to be slower and more fragile.
Within crypto itself, flows are improving even as prices struggle to gain traction. ETF activity has stabilised after recent outflows, and stablecoin supply continues to trend higher, suggesting dry powder is building on the sidelines. At the same time, market depth remains thin, leaving prices vulnerable to sharp moves during periods of lower liquidity, particularly outside US trading hours. This combination (improving flows but fragile structure) has been a recurring feature of the market in recent weeks.
Structurally, the longer-term backdrop continues to strengthen. Regulatory clarity is advancing across key jurisdictions, reinforcing the shift toward crypto being treated as part of the regulated financial system rather than operating at its margins. For institutional participants, this reduces uncertainty and supports more durable engagement over time, even if near-term price action remains choppy.
The near-term focus now returns to Bitcoin’s ability to stabilise and reclaim higher ground. The $94,000 area remains the first meaningful level that would signal improving sentiment, with $100,000 still acting as the key psychological threshold. Failure to make progress leaves the market exposed to further consolidation or renewed downside, particularly if broader risk markets wobble again.
Taken together, the setup remains finely balanced. Liquidity conditions are improving and structural foundations continue to firm, but investors are still cautious about where and how they deploy risk. For crypto, that means the ingredients for a recovery are gradually falling into place, but price action will need to confirm that confidence is returning. Until then, the tension between better macro plumbing and selective risk appetite is likely to define the market in the weeks ahead.