Market Dynamics and Trend Analysis

1. Macroeconomic Environment and Policy Trends

The Federal Reserve is facing unprecedented political pressure as the "Renovation Gate" incident continues to ferment. A politician personally visited the Federal Reserve headquarters to pressure the chairman over the $3.1 billion renovation cost and repeatedly urged for interest rate cuts. Although the idea of firing the chairman has been temporarily shelved, his allies have weaponized the issue politically, continuously applying pressure by accusing him of "mismanagement" and "misleading Congress" with the intention of undermining his credibility to influence interest rate policy. Some analysts believe this is an unconventional public opinion battle aimed at pushing for interest rate cuts while also diverting public attention from other controversies.

However, the current economic fundamentals indicate that the U.S. financial environment has become extremely loose: the Chicago Fed's National Financial Conditions Index has fallen to a three-year low, major stock indices have hit new highs driven by AI demand, the size of money market funds has reached $7.1 trillion, and household deposits remain high at $4.46 trillion. This flood of liquidity has put decision-makers in a dilemma—inflation is still above target and the job market is strong, but the government is calling for significant interest rate cuts due to high pressure from national debt issuance, and analysts are concerned that cutting rates at this time could exacerbate asset bubbles.

2. Cryptocurrency Market Analysis

Bitcoin trend

Multiple analysts have pointed out the short-term pullback risks for Bitcoin. One analyst focuses on the key range in the mid-$113,000s. Another noted the bearish divergence between the price and the RSI indicator, along with a futures gap located in the $114,380 to $115,635 range, indicating that price may adjust downward. Other analysts believe Bitcoin faces strong selling pressure at the $120,000 resistance level, with a cumulative net outflow of $285.2 million from spot ETFs over the past three days, but bulls have successfully defended the $115,000 support level; if the price can break through $123,218, it may advance towards the targets of $135,729 and even $150,000, whereas if it falls below $110,530, bears may take control.

An analyst observed that the Bitcoin cycle indicator has entered the "distribution zone," suggesting a high risk of short-term correction. However, he emphasized that key indicators have not yet peaked, indicating that we are not at the final top of the bull market. In the medium to long term, an investor has provided a buying range of $89,380 and a target price of $200,000.

Ethereum performance

In contrast, Ethereum shows relative strength. A model from a data analytics company indicates that Ethereum has solid support in the $2000 to $3000 range, with key resistance above at $4500. One analyst is paying attention to whether Ethereum will reach the key liquidity price of $3,476 in the short term and quickly rebound. In the long term, some investors have set a buy zone for Ethereum at $2,200 and a target price of $10,000.

However, some analysts warn that Ethereum may be unstable in the short term and carries the risk of a correction. They believe that Ethereum has risen too quickly in the short term and is technically "overbought." More importantly, the cost of borrowing Ethereum on certain lending platforms has surged, which may force some leveraged traders to close their positions and sell, triggering a price drop. Data shows that Ethereum's average return rate since 2013 in Q3 is 8.19%, while the average return rate in Q4 is 22.59%.

Other digital asset trends

Market funds are flowing from Bitcoin to Ethereum and other cryptocurrencies, but a comprehensive "altcoin season" has yet to be confirmed. Some analysts believe that Solana will rebound quickly after dropping to $173. In the NFT sector, a listed company announced it has acquired a rare NFT from a well-known project for $5.15 million and plans to incorporate it into its revenue strategy. The co-founder of a trading platform also stated that NFTs are the ultimate game of internet status, predicting that this NFT project will outperform Ethereum in dollar terms during this cycle, as ETH holders will use such assets to "show off" their social status.

In addition, after a tech entrepreneur announced the launch of an AI-based short video platform yesterday, the similarly named token surged by over 100% before narrowing its increase to 50%.

3. Market Data Overview

As of July 25, 12:00 HKT:

• Bitcoin price: $115,774 (Year-to-date +23.39%), daily trading volume $70.943 billion
• Ethereum Price: $3,638.16 (Year-to-date +8.78%), Daily Trading Volume $54.538 billion
• Market Sentiment: Fear and Greed Index 71 (Greed)
• Network fees: BTC 0.84 sat/vB, ETH 0.26 Gwei
• Market Cap Share: BTC 60.8%, ETH 11.6%
• 24-hour long/short ratio: 48.19%/51.81%
• Sector performance: NFT sector down 7%; AI sector down 4.3%
• Liquidation data: In the last 24 hours, 201,010 people globally were liquidated, with a total amount of $702 million.

4. ETF Capital Flows

As of July 24:

• Bitcoin ETF: +$227 million, turning to net inflow after three days of outflows
• Ethereum ETF: +$231 million, continuous net inflow for 15 days

5. Industry Trends

• A trading platform will delist multiple perpetual contracts.
• Multiple projects are about to undergo token unlocks.
• A well-known company sent approximately $140 million worth of XRP to the exchange within 7 days.
• A certain foundation and investment company plan to raise $400 million for its token treasury.
• An investment company plans to increase the scale of fundraising for purchasing Bitcoin to $2 billion.
• A certain company's Ethereum holdings have exceeded $2 billion, totaling 566,776 ETH.
• Multiple institutions collaborate to launch a new compliant stablecoin
• The next round of FTX compensation will be executed on September 30, releasing $1.9 billion in disputed creditor reserve funds.