Bitcoin (BTC) has been range-bound for months now, and a 12% pullback is keeping it firmly below $100,000. So what's behind the weakness? Traders are digging into the macro picture, and it turns out there are three forces at work.

The Three Macro Culprits

Pseudonymous macro researcher Capital Flows broke it down in a detailed thread, identifying the key drivers of Bitcoin's recent drawdown from $120,000 to $90,000:

• Bitcoin is acting as a risk-asset release valve: BTC remains highly sensitive to shifts in risk appetite. While it typically tracks equities, it has recently diverged because it responds more quickly to changes in macro liquidity and the broader risk curve.
• Real interest rates now dominate price action: Despite Fed rate cuts, what truly matters is net liquidity. Inverted 2-year real rates are moving almost tick-for-tick with Bitcoin, showing that rising real rates are creating downward pressure.
• Positioning and hedging pressures are driving short-term moves: Implied volatility in BlackRock's IBIT ETF is cooling even as BTC consolidates. Meanwhile, Bitcoin proxy equities are lagging, signaling investors are not yet ready to add risk. Capital Flows says a sustained rally requires BTC-linked equities to start outperforming again.

What Traders Should Watch

Capital Flows argues traders should ignore short-term noise. Bitcoin's price already reflects liquidity shifts, rate dynamics, and positioning pressures.

Widely-followed swing trader Jesse Olson added that BTC continues to struggle at its descending trendline, which remains firm resistance. Price has slipped back below key trend-support markers, and if the daily candle closes here, it could confirm another move lower.

Olson also noted that while many altcoins flashed bullish divergence, Bitcoin and Ethereum did not, weakening the case for an immediate reversal.