Hey, it’s Robert (otherwise known as Infra on YouTube and X)!

This week saw a bit of a scare for risk, but what does it actually mean for Bitcoin?

Here’s what you need to know ⬇️

Volatility Remains

This week saw a fair bit of volatility for risk assets, with the S&P 500 finishing the week down over 1%, after once again failing to break to a new all-time high. There were some even larger moves under the surface of the equity market, the VIX volatility index inched above 20 a few times, and bonds got a strong bid (never a great sign for risk assets)- but bitcoin appears to be hanging on.

This week saw retail sales, which showed a decent picture in nominal terms, but once adjusting for inflation, quite anemic spending growth from the US consumer. Existing home sales plummeted to the lowest level in years, contracting more than 8% month-over-month.

We also got some hugely important labor market data, with the latest Nonfarm Payrolls report out from the BLS, showing the US added far more jobs than expected (130k vs. 55k expected) and unemployment unexpectedly fell to 4.3%. Initial jobless claims came in generally in-line with expectations.

Inflation

We also got a read on the current state of inflation, with the BLS’s Consumer Price Index report out on Friday. While core inflation came in right in line with expectations (core strips out the volatile food and energy components), headline inflation actually came in lower than expected at just 2.4%- the lowest reading since May 2025. Core inflation came in at the lowest level since 2021.

Coupled with some of the risk-off atmosphere earlier in the week, bonds saw quite a strong bid as inflation appears to be moderating (inflation being the antithesis for bonds).

The 30-year US Treasury yield fell over 15 basis points on the week, with the 10-year US Treasury yield falling about 15 basis points as well. The 2-year Treasury, largely seen as the bond market’s prediction for the path of future Federal Reserve interest rate decisions, saw a decline of 10 basis points.

Bets on a third Fed rate cut reached 50% following the cooler-than-expected inflation print.

Bitcoin Hangs On

It’s important to note that Bitcoin has never experienced a prolonged economic contraction. With some defensive equity market positioning and strong performance in US Treasuries, the market is clearly a bit concerned about growth.

Despite the high beta nature of bitcoin, we didn’t actually see as much weakness as one might expect with those sort of growth concerns. Since Monday, bitcoin is finishing essentially flat on the week. Since last week’s selling climax, bitcoin is still up over 14% off the low.

Not only that, but at least for the past two trading sessions, bitcoin has once again reclaimed a positive correlation with gold, which is arguably even more important than the price of bitcoin in dollar terms.

Barring some intense weekend volatility, bitcoin is shaping up to print yet another bullish-looking 5-day candle. While the broader sentiment appears at near historic lows, bitcoin’s price is telling quite another story (especially considering the broader backdrop).

While it is of course possible that Bitcoin breaks the prior week’s lows, the fact that it held up so well over the past week could be a potential indication of a short-term low being put in.

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