The information, opinions, and judgments regarding the market, projects, and currencies mentioned in this report are for reference only and do not constitute any investment advice.
BTC Price Trend Daily
This week, BTC opened at $109,217.98 and closed at $119,130.81, up 9.08%, with a high of $119,500 and a low of $105,119.70, resulting in a volatility of 11.04% and a moderate increase in trading volume.
In last week's report, we mentioned, "Some positive changes are occurring; after being dormant for over a month, the activity of on-site funds is beginning to increase. This enhancement may resonate with off-site funds, driving BTC to initiate the fourth wave of this bull market." This week, the strong buying power of on-site funds resonated with the off-site funds from the BTC Spot ETF channel, pushing BTC to reach a historical high this week.
At the same time, uncertainty from the "tariff war," and the employment market information exceeding expectations has suddenly increased the expectations for interest rate cuts, which is worth close attention.
Policy, Macro Finance, and Economic Data
The tariff war and U.S. employment data are the main factors affecting the market this week.
On July 10, Trump announced a 35% uniform tariff on all Canadian imports starting August 1. On July 12, Trump demanded market opening, stating that if an agreement is not reached by August 1, a 30% tariff will be imposed on Mexico and the EU. Previously, the U.S. had already sent letters to Japan and South Korea setting the tariff rate at 25%.
Additionally, on July 12, Trump sent a uniform letter to 23 other countries, outlining tariff rates of 20-50%, but countries could negotiate to lower them before August 1.
Currently, the tariff rates announced for major trading countries exceed market expectations. Meanwhile, the $3.4 trillion "Big Beautiful Bill" tax reform and spending bill has entered a deep review stage in the Senate, with the U.S. deficit rate potentially soaring to 9% in the 2026 fiscal year. The "double-edged combination" of fiscal expansion and tariff inflation has led the market to reassess the risk of stagflation. Affected by policy uncertainty and robust data, the U.S. dollar index rose about 0.8% this week. Although concerns have not yet had a significant impact on the market, they are accumulating.
According to the Labor Department, the number of first-time unemployment claims fell to 227,000 for the week ending July 5, the lowest in seven weeks, far better than the market estimate of 235,000; the strong data has led traders to delay bets on the first interest rate cut in September. By the weekend, FedWatch data showed that the probability of a rate cut in July dropped to 5.2%, while the probability for September fell to 60.4%.
On July 2, Federal Reserve Chairman Powell emphasized at the European Central Bank's Sintra Forum that a rate cut in July is possible but not formally supported, and the second-round impact of tariffs on inflation remains uncertain. There is a division within the Federal Reserve, with several officials "submitting" to the idea of a rate cut, and this week the Director of the Federal Housing Finance Agency suddenly revealed that "Powell may resign."
Various signs indicate that the conflict between Trump and Powell regarding "interest rate cuts" is deepening. However, the key point is whether tariffs will lead to a significant rise in inflation; if so, it will directly affect the rate cut in September. U.S. stocks and BTC have already priced in a rate cut in September; if inflation shows significant upward signals, the market will come under pressure, likely leading to a certain degree of downward pricing, but it will not change the market trend.
Crypto Market
The uncertainty in the macro market affects U.S. stocks hovering near historical highs, with the three major indices slightly declining. However, benefiting from the dual resonance of substantial inflows of on-site and off-site funds, BTC surged 9.08% this week, reaching a historical high.
From a technical perspective, the biggest achievement for BTC this week is breaking through the "Trump bottom" established since November last year, which is the $90,000-$110,000 fluctuation range. BTC has oscillated in this range for as long as 8 months, making it the third major consolidation platform in this bull market cycle, with over 30% of BTC experiencing on-chain movement within this range.
This range priced in the significant breakthrough of BTC and crypto assets being established as strategic reserve assets for the U.S. since Trump's administration, which is highly significant. It also means that U.S. public companies incorporating BTC into their treasury will trigger large-scale institutional adoption. We believe this range will be a very important new starting point.
The breakthrough of this range signifies the official start of the fourth wave of this bull market for BTC. In the June monthly report, we mentioned that, like the past three waves, this round of increase is likely to be completed rapidly in a short time. This short time may be two to three months, which is worth close attention.
The breakthrough of the "Trump bottom," which had oscillated for 8 months, has also activated the bullish sentiment for other crypto assets, including ETH, leading to a broad market rally.
Fund Inflows and Outflows
With the resurgence of the tariff war, the global macro environment is once again facing tests, but the strong inflow of on-site and off-site funds has driven BTC to significantly outperform the Nasdaq this week, breaking through the "Trump bottom."
This week, the total inflow from stablecoins and the BTC Spot ETF channel reached $5.886 billion, with $2.177 billion from the stablecoin channel and $2.780 billion from the BTC Spot ETF channel. Additionally, the ETH Spot ETF channel also saw an inflow of $929 million, setting a record for weekly inflows since the establishment of this ETF type.
Stablecoin and BTC & ETH Spot ETF Fund Flow Statistics (Weekly)
Moreover, enterprise-level procurement is also accelerating.
The consensus for Q3 market conditions is growing stronger, and the robust inflow of funds is unlikely to change the trend in the short term, with the market regaining its bull market appearance.
Selling Pressure and Liquidation
Since July, as BTC approaches historical highs again, long-term holders have begun to reduce their holdings slightly. This week, as BTC broke through historical highs, long-term holders officially started to reduce their holdings, but the amount was only over 10,000 coins.
The selling scale of both long and short-term holders has increased compared to last week, but the main selling pressure comes from short-term traders. Currently, short-term holders are up about 18%, and selling pressure is gradually increasing, but it remains limited. Buying power is strong, and the overall trend in exchanges still shows an outflow.
We have mentioned multiple times that long-term holders reducing their holdings signifies the arrival of a new round of liquidity. The expectations for a rate cut in September remain unchanged, and the willingness of forward-looking trading funds to price upwards is very strong. This is also why we cautiously view BTC's performance in Q3 with optimism.
Cycle Indicators
According to eMerge Engine, the EMC BTC Cycle Metrics indicator is at 0.625, indicating an upward phase.
EMC Labs
EMC Labs was established in April 2023 by cryptocurrency asset investors and data scientists. It focuses on blockchain industry research and secondary market investment in crypto, with industry foresight, insights, and data mining as core competencies, aiming to participate in the thriving blockchain industry through research and investment, promoting the benefits of blockchain and crypto assets for humanity.
For more information, please visit: https://www.emc.fund
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