On June 24, influenced by the unexpected ceasefire agreement between Israel and Palestine, NYMEX crude oil futures plummeted by 6% during trading, briefly dipping to $64 per barrel, almost reversing all the gains made during the current geopolitical conflict. Meanwhile, global stock markets collectively surged, with Bitcoin soaring nearly 5% during trading, fully recovering all losses from the current geopolitical conflict. However, the market rebound did not eliminate cautious sentiment among investors. For instance, during the process of ETH rebounding 16% from its low, its funding rate remained in negative territory for an extended period, and the magnitude of the negative value continues to expand, indicating that investors still have a strong defensive mindset against a possible second bottom.
However, in an upward trend, a negative funding rate often indicates that the coin price has reached key resistance levels, reflecting more of an investor hedging operation due to increased short-term uncertainty rather than a bearish outlook for the future. For example, from late April to early May this year, Ethereum entered a consolidation phase where market hedging demand surged and funding rates continued to expand in negative territory; however, as the coin price broke through resistance, the market subsequently entered a continuous short-squeeze mode. Therefore, if Ethereum subsequently breaks through the heavily trapped area of $2500-$2600, it could similarly trigger a short squeeze.
From a trading perspective, the likelihood of ETH breaking through key resistance levels in the short term is high, mainly for two reasons:
Firstly, from a funding perspective, starting in June, ETH whales have significantly accelerated their accumulation speed. Glassnode
Data shows that from June 11 to 16, the daily average accumulation of addresses holding 1K-10K ETH exceeded 800,000 coins, pushing the total holdings of this group to surpass 14.3 million coins, marking the fastest accumulation rate since 2017.
At the same time, the Ethereum ETF in the US stock market continues to experience inflows of funds. Even with a single-day drop of 10% on June 22, the outflow scale of the Ethereum ETF was only $9 million, indicating that institutional demand for Ethereum allocation has entered a new phase of expansion.
Secondly, from a fundamental perspective, with the imminent introduction of the (GENIUS Stablecoin Bill), Ethereum, holding a 55% market share of stablecoins and 81% market share of RWA, occupies an absolute advantage and is likely to become the main beneficiary of the vigorous development of on-chain financial applications like PayFi and RWA, with its network revenue expected to experience explosive growth after the stablecoin bill is implemented. According to CoinMarketCap, despite the continuous decline of most altcoins since May, as of June 24, Ethereum still ranks third in the top 100 cryptocurrencies by market cap with a 41.3% increase. This indicates that the demand for Ethereum is undergoing a paradigm shift from 'mother of altcoins' to 'on-chain financial infrastructure'.
Although the upward momentum of both Bitcoin and Ethereum remains strong, Bitcoin is more likely to break through first. The main reasons are twofold:
1. Once a trend is formed, it often has a strong inertia—unless there is sufficient bullish release, otherwise it is difficult to reverse.
It is difficult to reverse. As exchange balances drop to 2 million coins (long-term investors' holdings have increased to 14.7 million coins), the market's existing supply continues to decrease, leading to a noticeable convergence in the magnitude of each technical pullback during Bitcoin's upward movement (the pullback from 111950 to 98200 has already been very sufficient; do not expect a larger drop).
2. According to data from Glassnode and Murphy, historically, whenever the concentration of Bitcoin holdings reaches 15% within a 5% price range, it triggers a trend reversal. Afterward, the holdings will tend to become more dispersed amidst significant price fluctuations. Currently, the concentration of Bitcoin holdings has reached 14.5%, which is at the critical point of a trend reversal.
In summary, after the trend of collective positioning reaches its extreme, Bitcoin may experience a rapid rise away from the market average cost in the short term, stimulating floating profits to release more liquidity, and even creating favorable conditions for the main players to unload. In other words, Bitcoin's current rise is likely the main upward wave of this market cycle, which could reach heights of 30%-40% (127600-137500).
At the macro level, although Chairman Powell still insists on denying the possibility of a rate cut in July during the latest congressional hearing, the consensus within the FOMC has clearly loosened—compared to the unanimous decision to maintain interest rates in June, two members (Christopher Waller and Michelle Bowman) have publicly supported a shift to easing in July. Behind this policy shift, the continued pressure from the Trump administration is indeed a factor, but more critically, recent economic data has continuously released positive signals: the May CPI data was below market expectations, indicating that service sector inflation remains on a cooling trend, and also that the transmission effect of tariffs on consumer prices is significantly weaker than expected.
Of course, the stability of import prices is largely due to businesses stockpiling goods before the tariffs take effect. However, given that tariff shocks are mostly one-time impacts, if the inflation data in July continues the current mild trend, the Federal Reserve may initiate defensive rate cuts in July to alleviate economic downward pressure (the Atlanta Fed's GDPNow model has already lowered its Q2 economic growth forecast to 1.5%).
Although the CME FedWatch tool shows that the probability of a rate cut by the Federal Reserve in July is only 23%, the derivatives market has seen unusually active bullish trading: just last Friday and Monday, traders invested at least $38 million in call options on 10-year Treasury bonds expiring in August, betting that yields will drop from the current approximately 4.3% to 4%. This trading volume represents an exponential increase compared to the cumulative trading volume of $1.08 million from the first four days of last week, indicating that some institutional investors are increasing their bets on interest rate declines.
As signals of marginal liquidity warming gradually become clearer, the likelihood of Bitcoin and Ethereum entering a main upward wave trend in succession is extremely high. Benefiting from a rebound in risk appetite, altcoins are also expected to welcome a large-scale corrective market. In summary, the current price reflects the market's expectations for the future, and the magnitude of price adjustments depends on the market's expectation differences. Therefore, when certain changes begin to appear, it is definitely more profitable to intervene early.