Recently, a series of actions by Trump has triggered global market turbulence: announcing the provision of advanced weapons to Ukraine through NATO while threatening to impose 100% secondary tariffs on Russia and setting a 50-day negotiation period. This series of measures has significantly impacted the crypto market, causing sharp fluctuations in the prices of Bitcoin (BTC) and Ethereum (ETH), leaving retail investors in the crypto space with complex emotions.
Under the influence of geopolitical factors: Cryptocurrency performance varies
Trump's actions have led to a decline in global market risk appetite, causing traditional safe-haven assets like gold and the US dollar index to rise, while cryptocurrencies have shown divergent trends.
- Bitcoin: Although affected by panic in the short term, its attribute as 'digital gold' is becoming more pronounced. Looking back at the early stage of the Russia-Ukraine conflict in 2022, Bitcoin plummeted by 13% but quickly rebounded and hit new highs. Trump's 'combination punch' may accelerate institutional capital influx, with institutions like BlackRock and MicroStrategy holding more than twice the daily output of BTC from miners, indicating a 'supply-demand imbalance'.
- Ethereum: Relatively under pressure. Although its on-chain ecosystem (such as DeFi, NFT) continues to expand, in the context of geopolitical conflicts, investors prefer to choose BTC, which has high liquidity and a more established historical validation. At the beginning of July, ETH briefly fell below the critical support level of $2400; from a technical perspective, it needs to break through the resistance zone of $2950-$3000 to regain its upward momentum.
Technical analysis: Key levels determine direction
- Bitcoin: After reaching an all-time high of $109,000 in June, it is currently consolidating in the $105,000-$108,000 range, with the narrowing Bollinger Bands indicating an impending trend change. If it can break through the resistance at $109,000, combined with continued institutional capital inflow, July may see a challenge to $130,000; if it falls below the support at $100,000, it could retrace to the $90,000-$100,000 range. Additionally, expectations of interest rate cuts by the Federal Reserve, the expansion of the US strategic Bitcoin reserves, and the continuous net inflow of spot Bitcoin ETFs ($4 billion added in June) all support the bullish case.
- Ethereum: After failing to stabilize above $3000 after breaking through in July, it is currently fluctuating in the $2900-$3000 range. It needs to break through the $3000 resistance level to open up upside potential; if it fails to break through, it may retest $2700. However, expectations for the approval of Ethereum ETFs and the increase in activity brought about by the expansion of Layer 2 networks (such as Arbitrum and Optimism) may provide mid-term support.
Differentiated institutional attitudes: Significant differences in capital flows
Against the backdrop of rising geopolitical risks, institutional attitudes towards the crypto market show significant differences.
- Bitcoin: Becoming the 'new favorite' of institutions for hedging. Recently, institutions such as Goldman Sachs and Morgan Stanley have significantly increased their holdings, viewing it as a 'digital reserve asset' to combat inflation and geopolitical risks. Although the correlation between Bitcoin and US stocks has risen to 0.74, institutions generally believe its 'non-sovereign attributes' still possess unique value.
- Ethereum: Relatively 'neglected'. Despite the continued prosperity of its ecosystem, institutions are more inclined to allocate to Bitcoin. As MicroStrategy founder Michael Saylor said: 'Ethereum is a tech stock, Bitcoin is digital gold.'
Future trend prediction: Opportunities and risks coexist
- Short-term (1-2 weeks): If the geopolitical situation does not deteriorate further, Bitcoin is expected to stabilize around $110,000 and attempt to break through $115,000; if the conflict escalates, it may drop to $105,000. Ethereum needs to closely monitor the $2900 support level; a breach could trigger a chain sell-off; if it holds, there is a chance to rebound to $3100.
- Medium to long-term (1-3 months): Bitcoin benefits from the inflow of institutional funds, expectations of interest rate cuts by the Federal Reserve, and the lagged effects of the 2024 halving, with a probability of breaking through $130,000 in July exceeding 60%, potentially challenging $150,000 by the end of the year. Ethereum needs to break through the $3000 mark and gain support from institutional ETFs; otherwise, it may continue to underperform BTC, although the explosion of Layer 2 ecosystems could become a key variable.
Retail investor response strategies
- Conservative: Allocate 70% of funds to Bitcoin and hold 30% in stablecoins or gold to hedge against risks.
- Aggressive: Accumulate ETH in batches when it falls below $2900, target price $3000; increase BTC position when it retraces to $105,000.
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