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This week BTC opened at $109,217.98, closed at $119,130.81, rising 9.08%, with a high of $119,500 and a low of $105,119.70, with a volatility of 11.04%, and trading volume moderately expanded.
In last week's report, we mentioned that "Some positive changes are happening, and the activity of internal funds has begun to increase after being dormant for over a month. This enhancement may resonate with external funds and drive BTC to launch the fourth wave of this bull market". This week, the resonance between internal funds and strong buying power from the BTC Spot ETF external channel was realized, pushing BTC to a new historical high this week.
Meanwhile, uncertainty has suddenly increased from the "peer tariff war" chaos and interest rate cut expectations due to unexpected employment market information, which is worth close attention.
Policy, Macroeconomic, and Economic Data
Tariff war and US employment data were 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, threatening 30% tariffs on Mexico and the EU if no agreement is reached by August 1. Previously, the US had already sent letters to Japan and South Korea setting tariff rates at 25%.
Additionally, on July 12, Trump sent a unified letter to 23 other countries, specifying 20-50% tax rates, but countries can negotiate reductions before August 1.
Currently, the tariff rates for major trading partners exceed market expectations. Meanwhile, the $3.4 trillion "Big Beautiful Bill" tax reform and expenditure bill is entering deep review in the Senate, with the US deficit potentially reaching 9% in fiscal year 2026. The "dual-blade combination" of fiscal expansion and tariff inflation is causing the market to re-evaluate stagflation risks. Influenced by policy uncertainty and stable data, the US dollar index rose about 0.8% on a weekly basis. Long-term concerns have not yet significantly impacted the market but are accumulating.
Labor Department data shows that initial unemployment claims for the week ending July 5 dropped to 227,000, a seven-week low, far better than the market's estimated 235,000. Strong data pushed traders to again delay bets on the first rate cut in September, with FedWatch data by the weekend showing a 5.2% probability of a July rate cut and a 60.4% probability of a September rate cut.
On July 2, Federal Reserve Chairman Powell emphasized at the ECB Sintra Forum that a July rate cut is possible but not officially supported, with uncertainties still existing about the second-round inflation impact of tariffs. Internal divisions are emerging at the Fed, with multiple officials "defecting" to support rate cuts, and this week the US Federal Housing Finance Agency director suddenly revealed that "Powell might resign".
Various signs indicate that the conflict between Trump and Powell regarding "rate cuts" is further deepening. However, the key point is whether tariffs will cause obvious inflation, which would directly affect September's rate cut. US stocks and BTC have already priced in the September rate cut. If inflation shows clear upward signals, the market will be under pressure and will likely see downward pricing to a certain extent, but this will not change the market trend.
Crypto Market
Macromarket uncertainty has caused US stocks to hover near historical highs, with the three major valuations slightly declining. However, benefiting from the double resonance of internal and external fund inflows, BTC rose 9.08% this week, creating a historical high.
Technically, the biggest achievement this week is BTC breaking through the "Trump bottom" established since last November, which is the 90,000-110,000 USD oscillation range. BTC has oscillated in this range for 8 months, the third-largest consolidation platform in this bull market cycle, with over 30% of BTC experiencing on-chain movement in this range.
This range priced the major breakthrough of BTC and crypto assets being established as US strategic reserve assets during Trump's presidency, which is extremely significant. It also means the large-scale institutional adoption of BTC by US public companies. We believe this range will be a very important new starting point.
Breaking through this range means BTC is officially launching the fourth wave of this bull market. In the June monthly report, we mentioned that, like the previous three waves, this wave is likely to be completed quickly in a short time. This short time might be two to three months and is worth close attention.
BTC breaking through the 8-month "Trump bottom" has also activated the long intentions of other crypto assets, including ETH, bringing a market-wide rally.
Capital Inflow and Outflow
Amid the resurgence of the tariff war and global macro challenges, robust internal and external fund inflows have pushed BTC to significantly outperform the Nasdaq and break through the "Trump bottom".
This week, stablecoins and the BTC Spot ETF channel totaled $5.886 billion, including $217.7 million in the stablecoin channel and $2.780 billion in the BTC Spot ETF channel. Additionally, the ETH Spot ETF channel saw an inflow of $929 million, setting a single-week record for this ETF type since its establishment.
Stablecoin and BTC & ETH Spot ETF Fund Flow Statistics (Weekly)Moreover, enterprise-level procurement is also accelerating.
Q3 market consensus is growing stronger, and the robust fund inflow is difficult to change the short-term trend, with the market regaining its bull market appearance.
Selling Pressure and Sales
Since July, as BTC approaches its historical high again, long-term holders have started to reduce positions slightly. This week, with BTC breaking through the historical high, long-term holders have officially started reducing positions, but the reduction is only slightly over 10,000 coins.
Selling volumes from long and short-term holders have increased compared to last week, but the main selling pressure comes from short-term traders. Currently, short-term traders have about 18% profit, and their selling power is gradually increasing but still limited. With strong buying power, exchanges remain in an overall outflow state.
We have mentioned multiple times that long-term holders reducing positions signals the arrival of a new liquidity cycle. With September rate cut expectations unchanged, forward-looking trading funds have a very strong willingness to price upwards. This is also why we cautiously remain optimistic about BTC's Q3 trend.
Cycle Indicators
According to eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.625, in an upward phase.
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