Report on July 2, 2025
Yesterday, after the US stock market opened high, it experienced a pullback, indicating that the bulls are clearly running out of steam, and the market is digesting short-term bubbles.
Bitcoin slightly retraced following the US stock market, while most altcoins are in a decline, indicating insufficient market liquidity.
Last night, Trump's big beautiful bill caused a heated debate in the Senate, and it was only passed narrowly after three Republican senators defected, resulting in a 50-50 vote, with Vice President Pence casting the crucial tie-breaking vote.
The bill will now be sent to the House of Representatives, and if the House agrees to the Senate's version, it can go directly to a vote before being sent to Trump for signing into law.
However, there are differences between the Senate and House versions, which will likely need to be revised, and after both sides reach an agreement, the process will need to be repeated, so it may not be finalized quickly in the short term.
1. Trump-Musk Battle
Trump and Musk have started arguing again over this bill, and it seems that Musk has really annoyed Trump this time.
Trump made harsh comments, aggressively shorting Tesla, and even suggested considering expelling Musk, leading to a drop of more than 5% in Tesla's stock price.
Musk stated that he wants the Republicans to lose the midterm elections next year. Currently, it appears that Musk is in a weaker position, as SpaceX and Starlink rely heavily on support from the Trump administration.
2. Middle East War
In the Middle East, the situation remains tense.
The US has approved arms supplies to Israel, which is stockpiling ammunition and rebuilding its military. It is estimated that after regaining strength, Israel will take action against Iran.
3. Federal Reserve Rate Cut
On the Federal Reserve side, Powell clearly stated yesterday that there will be no rate cut in July, and it might happen in September. He also mentioned that if it weren't for Trump's tariff policy, there would have been a rate cut in June.
Trump immediately lashed out, calling Powell an idiot, and said he would announce a new Federal Reserve chair candidate next week.
After Powell's speech, CME tools showed a 78.3% probability of no rate cut in July, with the probability of a rate cut in September rising to 71.8%.
4. On-chain Data
From the data, Bitcoin's market cap share has risen again, while altcoins' market cap share is declining, indicating that people are converting to Bitcoin for safety.
Although Bitcoin prices have fluctuated, it has not triggered market panic, with the fear and greed index around 46.
The market turnover rate is not high, and Bitcoin's short-term support is at $103,000.
People might believe that the Trump-Musk battle will not bring significant risks, and instead, there are some expectations for fiscal stimulus after the passage of the big beautiful bill.
From a funding perspective, there is an increase of $500 million in on-site funds, totaling $263.1 billion.
USDT's market cap is $15.7715 billion, with an increase of $22 million, and Asian funds are slightly flowing in. USDC's market cap decreased by $12.3 million, but trading volume surged by 167%, indicating that mainstream US funds are flowing out.
Overall, although there are favorable macro factors, the market seems to be skeptical. After the US stock market reached a new high, it experienced a pullback, and the risk market has entered a short-term adjustment phase.