As fresh macroeconomic uncertainty once again weighs on risk assets, Bitcoin has cooled off following a sharp rally over the past few weeks. As of press time, Bitcoin is down more than 2%, trading at $82,700. Other cryptocurrencies have also declined, with Ethereum similarly falling over 2%, while Solana (SOL) has dropped nearly 4%.

This pullback in Bitcoin comes after a rally in the early part of last week, when Bitcoin briefly broke above $87,000, hitting its highest level since January. Institutional demand also picked up, with Bitcoin exchange-traded funds (ETFs) attracting the largest weekly net inflow since the token surged above $126,000 to set a record high last October.

Spot Bitcoin ETF Inflows Surge

In the week ended September 25, U.S. spot Bitcoin ETFs attracted approximately $2.4 billion, the largest weekly inflow since the week ended October 10 last year — when inflows exceeded $2.7 billion. Shortly after that, the Bitcoin market experienced a sell-off that persisted through most of 2026. The recent surge in inflows was enough to push these ETFs into net positive territory for the year. As of the end of July, these funds had accumulated net outflows exceeding $5 billion; since then, fund flows have reversed, and year-to-date net inflows for 2026 now stand at nearly $1 billion.

However, the macroeconomic backdrop has been weighing on cryptocurrencies. After U.S. President Trump rejected Iran's latest proposal to reopen the Strait of Hormuz, cryptocurrencies fell alongside stocks and bonds, while oil prices climbed further. Meanwhile, the market is also digesting the Federal Reserve's decision to raise interest rates earlier this month. Traders have begun pricing in the possibility of another Fed rate hike in October, and that possibility has reached a considerable level.

Nevertheless, some investors believe that Bitcoin's recent weakness is merely a temporary pause after a strong rally, rather than the end of positive momentum. Richard Galvin, Executive Chairman of crypto investment firm DACM, said: "Based on just the past few days of weakness, I don't think this rally lacks confidence. Given the strength of the earlier advance, this kind of thing at some stage is to be expected."

Over the past month, Bitcoin has experienced a powerful rally. Since August 19, when the U.S. Treasury said it would increase long-term bond buyback volumes, the token has risen about 28%. Bitcoin is now on track for its best quarterly performance since the fourth quarter of 2024. At that time, Trump — who campaigned on a crypto-friendly policy platform and won re-election — helped Bitcoin surge 47%. This move marks a significant recovery from Bitcoin's performance in the first half of this year, though its price remains well below last October's high. As of now, Bitcoin has risen more than 40% during the July-to-September period, reversing the previous quarter's 14% decline.

Bitcoin on Track for Biggest Quarterly Gain Since Trump's Election Win

Bitcoin has shown relatively strong resilience in the face of various developments recently seen as potentially unfavorable to the broader industry. In addition to the Fed's rate hike, the U.S. Senate recently failed to advance the crypto-focused Digital Asset Market Clarity Act (CLARITY Act). The bill has been highly anticipated by crypto companies hoping the U.S. will establish clearer regulatory rules. At the same time, Bitcoin's link to the broader U.S. Treasury and liquidity environment has become increasingly close. U.S. Treasury yields are now higher than before the August 19 buyback announcement, which could make non-yielding assets like Bitcoin less attractive, especially as investors expect major central banks to continue maintaining high interest rates. Damien Loh, Chief Investment Officer at Ericsenz Capital, said: "If Bitcoin is going to break through its 2026 highs, the broader macro environment may need to become more favorable."