Recently, BTC has broken through all-time highs and is now at $117k. But it is worth noting that, unlike previous market trends, this round of rise was not driven by leverage, and retail investors remained unexpectedly calm. As prices hit new all-time highs, we need to acknowledge that BTC is entering the next trading range.
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Multiple favorable catalysts are emerging one after another, laying a good foundation for the upward trend in the next few months. BTC has broken through a key trend line, releasing a strong technical breakthrough signal. Since mid-April, BTC spot ETFs have continued to receive capital inflows. Since its launch in January 2024, BTC ETFs have accumulated $49 billion in capital, and structural funds have begun to steadily build positions. July is a strong season for BTC, and with the arrival of Crypto Policy Week in Washington, the market is ushering in a rare resonance of macro and regulatory benefits. Against this background, the GENIUS Act is accelerating its review process in Congress, which is expected to have a substantial impact on stablecoin regulation and the popularization of digital assets.
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The Federal Reserve had previously judged that the new round of tariff policies promoted by Trump would bring inflationary pressure. On the Liberation Day in April this year, after the relevant policies were officially announced, consumer sentiment once tended to be cautious, and short-term inflation expectations also rose. However, from the actual data, inflationary pressure has not appeared, and it is still in a moderate range overall. The latest three CPI data are all at 2.4% or below, close to the Feds 2% inflation target; and it has been lower than market expectations for four consecutive periods, and the markets concerns about the rebound in inflation have been significantly alleviated. The recently released CPI data is crucial and worthy of market attention.
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The Fed is facing continued political pressure. The minutes of the FOMC meeting on June 17-18 showed that Fed officials as a whole tended to start cutting interest rates, although there were still some internal differences. On the day the minutes were released, BTC rose 2%. The market generally expects two interest rate cuts this year, and the first rate cut may be implemented in September. If inflation data does not rebound significantly next week, Powell will face greater market and political pressure and must give a clear explanation for his continued hawkish stance.
Summarize
This round of BTC rise is obviously different from the retail leverage rush to the top market that was common at previous highs. The overall leverage usage is limited, and the funding rate has only slightly turned positive. The real driving force comes from the continuous inflow of BTC spot ETFs and corporate allocation needs. Open interest has risen moderately with prices, and no obvious new leveraged longs have entered the market. Despite the record high, most traders still maintain light positions, and the market is far from entering the crowded stage. At the current funding level, ETFs have accumulated net inflows of US$49 billion; the policy side has turned to easing, and CPI is expected to remain moderate; in terms of supervision, the GENIUS Act is also expected to make substantial breakthroughs next week. Combined with the seasonal advantages of July, the market is ushering in a rare resonance of multiple positive factors. However, judging from the position structure and price trends, the market has not yet fully priced in the above-mentioned positive factors, and there is still room for further fermentation in the future.
Disclaimer: The market is risky and investment should be cautious. This article does not constitute investment advice. Digital asset trading can be extremely risky and unstable. Investment decisions should be made after carefully considering personal circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
