Initially, both the U.S. stock market and the cryptocurrency market were optimistic when they opened on Monday, and with the positive influence of tokenization in the U.S. stock market yesterday, Bitcoin briefly rose above $108,000. However, unexpectedly, Trump and Musk had another spat on social media yesterday, with Musk criticizing the big and beautiful legislation for leading to the downfall of America and threatening to form a new political party if the legislation passes. Trump then retaliated by saying he would terminate subsidies and contracts for Musk's company, and even considered deporting him.
Moreover, at the European Central Bank forum, Powell's stance on interest rate cuts remains unchanged. He stated that it is still too early to confirm a rate cut in July, emphasizing that decisions will be based on data. He pointed out that while the impact of tariffs has not yet reflected in economic data, the timing for a rate cut remains uncertain, and he expects inflation to rise in the summer. Today and tomorrow, the U.S. will release some employment data, which will have a certain impact on the decisions regarding rate cuts in July or September.
The simultaneous occurrence of two bearish events caused Bitcoin to briefly fall below $106,000. In the U.S. stock market, the Nasdaq index was significantly impacted because Tesla's stock price dropped by 5%. Initially, the big and beautiful legislation was positive for the market in the short term, but if the conflict between Musk and Trump escalates due to the passage of the legislation, the market may face a new wave of shocks. So we need to pay attention to how far they intend to escalate this or if, like before, they will shake hands the next day and let the market rebound.
On the other hand, the U.S. Securities and Exchange Commission (SEC) on Tuesday approved the conversion of the Grayscale Digital Large Cap Fund into an ETF under an accelerated review process, opening the door to Wall Street for this diversified cryptocurrency fund and warming up for a series of cryptocurrency spot ETFs waiting for review.
The Grayscale Digital Large Cap Fund was previously only available for qualified investors to trade over-the-counter (OTC), but will now be transformed into an ETF listed on the exchange.
According to official website data, this fund primarily holds Bitcoin, accounting for about 80%; Ethereum is second, at about 11%; the remainder consists of Solana (SOL), Ripple (XRP), and Cardano (ADA), with single coin weights all in the single digits.
After the approval of Grayscale's fund, other cryptocurrency spot ETFs, such as XRP, SOL, and ADA, are also expected to emerge successively.
Although Bitcoin has fallen nearly 1% in the past 24 hours, dipping to a low of $105,157 at one point, the sentiment in the cryptocurrency market remains stable.
Market sentiment remains optimistic.
At the beginning of this week, optimism was high, with BTC hovering just below the $109,000 mark, before entering a new round of short-term corrections.
Data from Glassnode shows that Bitcoin's price fluctuations between $100,000 and $110,000 are the result of profit-taking.
Data shows that medium- to long-term holders (LTH) led this round of selling. Among them, tokens held for 3-5 years realized profits of up to $849 million, tokens held for 7-10 years had a total value sold of $485 million, and tokens held for 1-2 years also realized about $445 million in profits.
Therefore, the selling pressure from long-term investors poses a significant challenge to the current price increase of Bitcoin.
Data shows that daily actual profits reached $2.46 billion, with a 7-day average rising to $1.52 billion, exceeding the year-to-date average of $1.14 billion, but still below the peak of $4-5 billion set in the fourth quarter of 2024.
Despite the selling by long-term holders (LTH), there are still positive factors, as data shows that activity is net positive.
Despite facing selling pressure, BTC prices remain stable, indicating that the market is absorbing this selling pressure through stable demand.
There has been an increase in the activity of holding tokens for about 1 to 3 years, reflecting that buyers took profits in the last cycle. If there is any difference, it suggests that market control has shifted from old investors to new investors. This change is a sign of strengthening rather than weakening power.
Historical probabilities favor Bitcoin's bull market in July.
BTC may continue the upward trend of the S&P 500 index in July over the past decade. The S&P 500 index just set a monthly closing high in June, and history shows that July is usually the strongest month for Bitcoin.
Since 2013, the average return rate of BTC in July has been 7.56%, with 8 out of 12 periods showing an increase, including a 24.03% increase in 2020. The third quarter typically sees strong returns for risk assets, and the correlation between Bitcoin and the S&P 500 index suggests that BTC may set a historical high of over $112,000 this month.