The current market is in an adjustment phase influenced by both macro policies and regulatory expectations. Federal Reserve Chairman Kevin Walsh continues to maintain a hawkish stance, leading to ongoing adjustments in market expectations regarding interest rate paths; meanwhile, the legislative process of the CLARITY Act has slowed, diminishing the earlier market expectations for regulatory benefits. Despite the continued fermentation of these two adverse factors, Bitcoin remains within the range of $62,000 to $66,000, demonstrating strong resilience.

From the current performance, the trading volume in the cryptocurrency market has decreased by 80% from its peak, shrinking about 60% from the peak in Q4 2025, with the total market capitalization also falling by approximately 50%. The market still lacks new USD liquidity, but amidst the continuous low trading volume and cooling regulatory expectations, Bitcoin has not experienced a larger decline, and market focus is gradually shifting from short-term adverse factors to whether this cycle is nearing a bottom.

The Federal Reserve Maintains a Hawkish Stance, Regulatory Expectations Cooling Suppress Market Sentiment

Since the nomination news of Kevin Walsh in late January 2026, the Federal Reserve's policy stance has been more hawkish than previously expected by the market, with the two-year U.S. Treasury yield rising by about 35 basis points during the same period. Although Walsh has repeatedly emphasized that inflation remains above target, the market is more concerned about the uncertainty brought by policy communication. Currently, the voting results of the committee show a pattern of 9 votes supporting the maintenance of interest rates and 3 votes supporting rate hikes, with discussions of further tightening policy heating up.

Meanwhile, the pace of advancing the CLARITY Act has also slowed. As of July 17, the prediction market shows only a 32% probability of it being signed into law by the end of 2026. With the Senate prioritizing other topics, the summer recess approaching, and controversies over stablecoin interest payments, anti-money laundering, and ethical clauses still unresolved, the time window for the bill to complete the Senate vote, House confirmation, and presidential signing is further narrowing.

The Market Still Lacks New Liquidity, Bitcoin Shows Resilience

Currently, the supply of stablecoins has not yet resumed sustained growth. Since November 2025, the market value of USDT and USDC has not shown significant expansion, reflecting that the digital asset market has not welcomed new USD liquidity, and if the market lacks a new net inflow of funds, it is still difficult for cryptocurrency prices to form lasting upward momentum.

However, compared to most altcoins, Bitcoin still demonstrates stronger relative performance. Since the market peaked in October 2025, tactical models have continued to favor Bitcoin, with many old cycle projects still affected by historical chips and unlocking pressures, while Bitcoin has only retraced about 3% in the past week despite the combined adverse factors of the Federal Reserve's sustained hawkishness and weakened prospects for the CLARITY Act. This resilience indicates that investors needing to adjust their positions may have basically completed their rebalancing, making it increasingly difficult for the market to continue to plummet from current levels.

Overall, the current market still faces multiple influences from hawkish monetary policy, slowing regulatory progress, and cautious funding, but Bitcoin remains relatively stable amid low trading volumes and a lack of new liquidity, reflecting that the downward pressure in the current cycle is gradually weakening. If Bitcoin reclaims $70,000 and pushes several indicators to bullish, it will further indicate that the low point of this cycle has been established.

Some of the views above are from BIT on Target, Contact us to obtain the complete BIT on Target report.

Disclaimer: The market has risks, and investment should be approached cautiously. This article does not constitute investment advice. Trading digital assets may involve significant risks and instability. Investment decisions should be made after carefully considering personal circumstances and consulting financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.

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