Today's market has been a heartbeat game, with Bitcoin oscillating between $106,000 and $108,000. It briefly dropped to a low of $105,344 in the morning and then pulled back near $107,571 in the afternoon, showing a small increase of 0.6% over 48 hours. The trading volume slightly expanded but was not considered crazy. Ethereum is more entangled, stuck around $2,440, with a slight decline of 0.3% over 24 hours. Mainstream altcoins like SOL and ADA have performed well, generally rising around 1.5%. However, SOL, after a spike due to ETF news, has fallen nearly 6%, indicating that market sentiment is still fragile.
Why is the market so twisted today? Three key driving forces must be understood:
1. The policy environment has suddenly warmed up. The US SEC is simplifying the cryptocurrency ETF application process, and the stablecoin regulatory bill is also advancing rapidly. This directly boosts platforms like Coinbase; USDC is favored, but Tether is under pressure.
2. Macroeconomic pressures have temporarily eased. There are no new disturbances in the Middle East, risk aversion sentiment has cooled, coupled with a decline in US Treasury yields and a weak dollar, the market's expectations for a Fed rate cut in September have heated up again.
3. On-chain data has revealed some underlying trends. The Bitcoin balances on exchanges are still declining, while long-term holders are hoarding 14.7 million BTC without budging, indicating that seasoned players are not scared off by the volatility, and the rhythm is to buy the dip.
However, hidden dangers are also brewing:
Trump's grand and beautiful tax reform bill has just passed the Senate with a narrow 51:50 margin. It plans to cut taxes and reduce healthcare spending, but the cryptocurrency tax incentives were kicked out, raising concerns that a $3.3 trillion surge in fiscal deficit could pose a risk.
The matter of the Fed rate cut is still in a state of tai chi. Powell has stated that he does not rule out action in July, but his body language is honest, emphasizing that if the economy is doing well, there is no rush, causing traders to hedge in advance, waiting for tomorrow's non-farm payroll data to determine their fate.
There are signs of divergence in the capital market. The Bitcoin ETF has ended its 15-day net inflow, with $342 million leaving yesterday, while the Ethereum ETF has attracted $40 million for three consecutive days, indicating that some large funds are adjusting their positions.
Both bulls and bears are currently holding back big moves:
Bulls are watching historical patterns; over the past decade, Bitcoin has averaged a 9.1% increase in July. If this script is replicated this year, it could surge to $116,000 by the end of the month; alongside institutions like Standard Chartered calling for a Q3 target of $135,000, the greed index remains steady at 63, and leveraged long positions are still increasing. However, bears are also not intimidated, with analyst CryptoCapo warning that the real sell-off hasn't even started, stating that Bitcoin could drop to $93,000 or even $60,000, with altcoins needing to start at a 50% cut.
In operation, one must learn from the loach, be a bit slippery:
In the short term, tomorrow's non-farm payroll data is a powder keg. If the employment data disappoints, expectations for a Federal Reserve rate cut will rise immediately, and the cryptocurrency price may surge; but if the data is strong, the risk of a pullback will be significant. For the medium to long term, stay calm with the physical assets. Although the third quarter is traditionally a slow season, the average increase is still 5.47%. A deep drop can be an opportunity for phased accumulation. Additionally, Ethereum's new variables are worth monitoring: the community spontaneously established Ethereum Foundation 2.0, which exclusively invests in projects that do not issue tokens and only generate ETH. If it scales up, the demand for ETH destruction could surge, which is a strong long-term value support.
In summary, the market is waiting for macro signals to be released. Don't be fully positioned, avoid excessive leverage, and keep enough bullets to respond to changes. Staying steady is the key to benefiting from the second half of the year. If you currently feel helpless or confused while trading in the cryptocurrency circle, I hope my sharing can provide you with some inspiration and help! Follow me to avoid getting lost; I will provide a daily market review!
$BTC