The information, opinions, and judgments on markets, projects, and currencies mentioned in this report are for reference only and do not constitute any investmentadvice  .

BTC daily trend

BTC opened at $114,215.70 this week and closed at $119,309.37, with a low of $112,622.14 and a high of $119,324.08, an increase of 4.46%, an amplitude of 5.97%, and a shrinking trading volume.

This week's US economic and employment data didn't undermine expectations that slowing inflation and sluggish employment would inevitably lead to an interest rate cut. Furthermore, with dovish voices growing increasingly vocal within the Federal Reserve, forward-looking trading based on expectations of a rate cut dominated the market, leading to significant gains for both US stocks and Bitcoin (BTC).

However, concerns remain. Next week's release of the US Consumer Price Index for July will further reveal the extent of the impact of the "reciprocal tariff war" on inflation. If the data deteriorates significantly, the optimistic market is expected to experience a significant shock.

Policy, macro-financial and economic data

The impact of the "reciprocal tariff war" on the market seems to be fading. Now the underlying logic of the game in the US financial market is - how will the non-farm payroll data and CPI be pulled together? Can the interest rate be cut as scheduled in September? Will there be two or three interest rate cuts this year?

Amidst a fragile balance, US stocks rallied again, shaking off last week's gloom. The Nasdaq, S&P 500, and Dow Jones surged 3.87%, 2.43%, and 1.35%, respectively, with the Nasdaq hitting a new all-time high, fueled by strong support from technology stocks.

This week's economic and employment data struck a chord —deteriorating, but not too bad. The July ISM non-manufacturing PMI, released on Tuesday, came in at 50.1, below expectations of 51.5, but the difference wasn't significant. Thursday's non-farm payroll data showed 226,000 initial unemployment claims for the week ended August 2, slightly exceeding expectations of 221,000. These data suggest that the job market is cooling, but not yet deteriorating, and a hard landing can still be avoided.

On the Federal Reserve side, with Trump nominating dovish Stephen Milan to fill the vacancy left by outgoing Governor Kugler, support for a rate cut is growing among Fed governors, reinforcing market confidence in a September rate cut. Governor Bowman explicitly expressed support for a September rate cut, the third such cut this year.

FedWatch currently shows an 88.9% probability of a rate cut in September, a 57% probability of an October cut, and a 46.7% probability of a December cut. The market is pricing in three rate cuts this year, which is the main reason for the strong rally in US stocks this week.

U.S. stocks rose, corporate purchases and Spot ETF channel funds resumed buying, driving BTC and ETH to rise sharply.

However, it is important to note that the three rate cuts priced in by the market still face challenges, such as whether CPI will rebound sharply due to tariffs. This significant uncertainty will still make the market's optimistic pricing seem too high.

Crypto Market

Driven by strong capital, BTC almost recovered all of last week's losses this week, approaching $120,000 again, causing the daily moving average to stretch upward again. At the weekend, BTC stood above the 30-day moving average and returned to strength.

The current BTC rally has weakened for two reasons. First, the continuous selling of long-term investors, especially those across cycles, has consumed a large amount of market liquidity. Second, a large amount of funds are shifting from BTC to ETH both on and off the market.

This trend continued to intensify this week. ETH surged 21.56% this week, breaking through the $4,000 mark in one fell swoop, setting a record high price in this cycle and approaching the historical high set in November 2021.

ETH/BTC continues to rise. We believe ETH will continue to strengthen for some time to come, significantly outperforming BTC. However, BTC still has good fundamentals and will continue to rise before September.

Capital inflows, outflows, and selling

This week, the total market capital inflow reached US$6.172 billion, slightly higher than last week's US$6.104 billion, of which 2.582 billion was from the stablecoin channel, 257 million was from the BTC Spot ETF channel, 1.807 billion was purchased by BTC companies, 321 million was from the ETH Spot ETF channel, and 1.206 billion was purchased by ETH companies.

Crypto Market Capital Inflow and Outflow Statistics (Weekly)

Whether it is BTC or ETH, the Spot ETF channel has achieved positive inflows this week, but the scale is still small, and corporate purchases have become the decisive force driving price increases this week.

Regarding BTC selling, short-term profits remain below 10%, creating no significant pressure. Compared to last week's significant reduction, this week's BTC long-term reduction has also moderated, and the overall realized value on the chain is not high. Centralized exchanges have seen an outflow of over 12,000 coins.

Cycle indicators

According to eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.75, which is in an upward phase.

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