Bitcoin [BTC] has spent most of mid-2025 in a holding pattern, consolidating within a tight range and frustrating both bulls and bears. At the time of writing, BTC appeared to be navigating a “neutral” zone—neither collapsing nor making a meaningful move upward. While the market remains cautious, signs are emerging that suggest Bitcoin may be preparing for a significant breakout in the second half of the year. Two key signals—macroeconomic policy shifts and on-chain accumulation—are now fueling speculation that the king of crypto could be ready for its next leg up.

Cautious Optimism Amid Macroeconomic Uncertainty

Much of Bitcoin’s price action this year has been shaped by speculation about the U.S. Federal Reserve’s monetary policy. Despite growing market hopes, the Fed has not enacted a single rate cut in 2025 so far. The latest Federal Open Market Committee (FOMC) meeting maintained the status quo, keeping rates steady. As a result, Bitcoin’s price barely flinched, dipping just 0.24% on the day of the statement.

Yet, the language from Fed Chair Jerome Powell hinted at a possible policy shift later this year. Traders interpreted this as a subtle green light—an acknowledgment that the Fed is at least open to easing financial conditions if inflation remains under control. This alone has kept risk appetite alive across markets, including crypto.

A historical lens supports this outlook. In Q4 2024, Bitcoin staged a powerful rally from $89,000 to over $109,000, tracking closely with the Fed’s three consecutive rate cuts. That monetary loosening helped inject liquidity into the financial system and triggered risk-on sentiment, benefiting high-beta assets like BTC. Now, investors are eyeing a potential replay in H2 2025, where even one rate cut could rekindle market momentum and drive a fresh surge toward new all-time highs.

Adding fuel to this fire is a sharp uptick in Open Interest (OI) on Bitcoin Futures contracts. In recent days, OI spiked 3.4%, a sign that leverage is returning to the market. However, this time, it may not be speculative froth. One anonymous trader—reportedly boasting a perfect 29-for-29 record—opened a staggering $29 million long position on BTC. This suggests that some insiders may be betting on more than just hopium.

On-Chain Signals Reveal Smart Money Accumulation

Beyond macro speculation, Bitcoin’s on-chain metrics reveal a powerful accumulation phase that could be laying the groundwork for the next rally. A recent report from Glassnode highlighted that while daily transactions have dropped to between 320,000 and 500,000 (from a 734,000 peak in 2024), the value being transferred remains robust.

Roughly $7.5 billion in BTC is changing hands daily, with the average transaction size hovering around $36,200. Notably, transactions over $100,000 now account for an overwhelming 89% of all volume—up significantly from 66% just two years ago. This shift confirms that large holders, or “whales,” are dominating activity and could be quietly stacking BTC during the ongoing lull.

Complementing this trend is a drop in exchange inflows, particularly to Binance. CryptoQuant data shows that both whale and retail deposits are at cyclical lows. Historically, reduced exchange inflows indicate reduced sell pressure and stronger conviction among holders. Combined, these factors suggest that smart money is either accumulating or holding tight in anticipation of an upside breakout.

Consolidation or Springboard?

So far, Bitcoin has been locked below its previous high of $109,000, with price action largely moving sideways amid conflicting macro and technical cues. However, the calm may soon break. Historically, prolonged periods of low volatility and steady accumulation tend to precede explosive moves.

The technical base being built at current levels could allow Bitcoin to rally past $110,000 and establish a new leg higher, particularly if rate cut expectations become reality and institutional capital continues flowing in. The confluence of low volatility, strong on-chain data, and renewed leverage indicates that the market may be entering a pivotal phase.

Conclusion

While uncertainty still clouds the broader market, Bitcoin is showing signs of underlying strength. Fed policy remains a crucial external variable, but internal market dynamics—like institutional accumulation and suppressed exchange activity—suggest that BTC’s foundation is stronger than it appears on the surface. If the $110,000 mark is breached decisively, it may not be the end of the rally but rather the beginning of a historic move for Bitcoin in H2 2025.