Can Bitcoin Keep Its Momentum in Q3 2025?
Bitcoin began the third quarter of 2025 trading above $106,000, following a robust 30% gain in the previous quarter. This marked the asset’s strongest quarterly performance since early 2020 and has renewed optimism among investors. Yet, as the market enters a new quarter, Bitcoin’s future remains uncertain. The digital asset now faces a complex set of macroeconomic conditions that could either sustain the current rally or reverse its momentum.
After maintaining interest rates at 5.25% to 5.50% throughout the first half of 2025, the U.S. Federal Reserve has signaled that only one rate cut is likely this year. This position comes despite clear signs of cooling inflation. The May 2025 Consumer Price Index rose by just 0.1% month-over-month, bringing the year-over-year figure to 2.6%—within range of the Fed’s long-term target.
Market sentiment suggests the possibility of a rate cut in September, with futures pricing reflecting approximately a 60% probability. Historically, Bitcoin has responded positively to monetary easing, as lower interest rates reduce the attractiveness of yield-bearing traditional assets and enhance the relative appeal of non-yielding stores of value like Bitcoin.
However, the outlook remains fragile. Any inflationary resurgence—potentially driven by energy price shocks or renewed supply chain disruptions—could prompt the Fed to maintain its hawkish stance. This would likely dampen risk sentiment and pressure Bitcoin and other digital assets.
Global Liquidity Expansion Supports Accumulation
Broad monetary trends are signaling improving liquidity conditions. Global M2 money supply has expanded by approximately 4.2% in the first half of 2025, including a 3.9% increase in the U.S.—the strongest pace in over three years. Central banks worldwide have shifted from aggressive tightening in previous years to more accommodative or neutral policy stances, which in turn has supported financial markets.
On-chain data reinforces this liquidity story. Over 180,000 BTC have been withdrawn from centralized exchanges since April, indicating significant accumulation by long-term holders. The exchange net position change has remained negative in nine out of the last ten weeks, typically a bullish signal.
Bitcoin’s realized volatility has also declined, dropping from 55% in March to 38% by late June. This reduction in volatility suggests improving market depth and structural maturity, although it may also reflect a lack of immediate catalysts. Meanwhile, the MVRV Z-score has climbed above 2.1—historically a level associated with the early-to-middle stages of bull markets, albeit with diminishing upside asymmetry.
Geopolitical and Regulatory Tensions Add Uncertainty
While monetary and liquidity conditions offer a potential tailwind, geopolitical developments and regulatory changes could act as a counterweight.
Recent instability in the Middle East led to a temporary surge in oil prices during June, reviving fears of inflation. Though conditions have since calmed, energy markets remain sensitive, and a renewed spike in oil or commodity prices could complicate the macro outlook.
In parallel, trade tensions between the United States and China have re-emerged, with speculation growing around the return of tariffs on key technology components. Such policy changes could elevate inflationary pressures globally and further delay monetary easing, affecting broader market sentiment.
On the regulatory front, developments have been more constructive. In the U.S., progress is being made toward regulating stablecoins, and several spot Bitcoin exchange-traded funds (ETFs) approved earlier this year have collectively attracted more than $7 billion in assets under management. These products are gradually integrating digital assets into mainstream portfolios.
In Europe, the Markets in Crypto-Assets (MiCA) framework is set to become fully operational by August 2025, providing a harmonized regulatory environment expected to attract institutional investors. Nevertheless, uncertainty persists around how enforcement actions or political changes could influence long-term confidence in the sector.
Scenario Outlook: What Might Q3 Look Like?
Given the mix of macroeconomic signals, analysts outline several scenarios that could play out over the third quarter:
| Scenario | Probability | Projected BTC Range (End Q3) |
|---|---|---|
| Fed cuts rates, stable macro environment | 50% | $115,000 – $130,000 |
| Hawkish Fed or inflation rebounds | 30% | $100,000 – $110,000 |
| Geopolitical or regulatory disruptions | 20% | $85,000 – $100,000 |
The base case envisions continued institutional accumulation, modest inflation, and a dovish pivot by the Fed. In such a scenario, Bitcoin could challenge its previous all-time highs. However, should inflation persist or geopolitical tensions escalate, a more constrained outcome or a pullback becomes more likely.
Market Correlations and Institutional Behavior
Bitcoin’s price trajectory is increasingly correlated with traditional financial markets. The 30-day rolling correlation with the S&P 500 recently climbed to 0.62, highlighting Bitcoin’s sensitivity to broader risk sentiment. As a result, any major movements in equity markets—particularly in response to inflation or policy changes—are likely to ripple into the crypto space.
Meanwhile, institutional behavior continues to support a long-term bullish thesis. Inflows into regulated crypto products and increased activity among family offices and hedge funds suggest growing acceptance of Bitcoin as a strategic portfolio allocation.
Strategic Considerations for Q3
Retail investors may consider maintaining a dollar-cost averaging strategy, particularly during any short-term corrections or volatility spikes. Institutional investors will likely focus on ETF flows, on-chain signals such as exchange balances, and global liquidity metrics.
Short-term traders should pay attention to economic data releases, especially inflation reports and Federal Reserve communications, as these are likely to trigger the most significant price reactions.
While Bitcoin’s core value proposition remains unchanged, its near-term price action is increasingly dictated by external macroeconomic and political forces. In this environment, successful investors will need to look beyond crypto-specific indicators and focus on the global economic picture.
Conclusion
The third quarter of 2025 presents both significant opportunity and considerable uncertainty for Bitcoin. Softening inflation, rising global liquidity, and a maturing regulatory landscape provide a solid foundation for continued growth. However, the risks of monetary tightening delays, geopolitical conflict, or regulatory backsliding remain real.
Bitcoin’s ability to thrive in Q3 will depend not just on its internal fundamentals, but on how it navigates a world still shaped by central banks, sovereign policies, and market psychology. For now, the asset remains in a position of strength—but it will need macroeconomic alignment to stay there.