July Crypto Market Overview

Overview

• In July, the U.S. economy continued the pattern of rising inflation and weakening growth momentum, with both CPI and core inflation exceeding the 2% target, making a policy shift difficult in the short term. The labor market remained generally stable but showed marginal weakness, and consumer recovery was mild but based on unstable fundamentals. Internal disagreements within the Federal Reserve about the timing of interest rate cuts have increased, with market expectations suggesting a potential cut in September, although this still depends on subsequent data. Geopolitical risks and domestic policy games have intensified uncertainty, leading the Fed to maintain a high interest rate and a wait-and-see stance, putting overall market risk appetite under pressure.

• In July, the trading volume of the crypto market rose significantly, with an average daily volume of $161.2 billion, a month-on-month increase of 56%, and multiple single-day volumes exceeding $200 billion. The total market capitalization rose to $3.94 trillion (+16.2%), with BTC's market share at 60.6% and ETH's market share at 11.8%. Funds are rapidly flowing from BTC to ETH and its ecosystem, and market sentiment is quickly warming up. Newly launched popular tokens are mainly focused on infrastructure projects, with Layer 1/Layer 2 receiving the most attention, and DeFi applications remain an important growth driver.

• In July, BTC spot ETF saw a net inflow of $20.15 billion, while ETH had a net inflow of $10.71 billion, leading to price increases of 11.46% and 55.83%, respectively, indicating stronger attraction for Ethereum. During the same period, the circulation of stablecoins surged by $9.617 billion, with USDE growing by 36.2% in a single month, leading the market.

• This week, BTC repeatedly attempted to break through $120,000 but failed. After reaching a peak of $120,113 on July 23, it retraced to a low of $114,759, with the current price around $119,600, still constrained by the 20-day moving average at approximately $116,300. ETH performed the strongest, rising from $3,740 to $3,881 in the last two days, with a net inflow of $2.4 billion into ETFs over six days. After breaking through $3,745, it is expected to look towards $4,094-$4,868. SOL is relatively weak, dropping below $200 to a low of $184, currently consolidating in the range of $187-$190.

• Several US companies have significantly increased their holdings in ETH and engaged in on-chain staking, driving ETH towards becoming an institutional-grade reserve asset. The "GENIUS Act," as the first federal legislation on stablecoins, has come into effect, clarifying the regulatory path and stimulating stablecoin inflows and institutional布局. The first Solana ETF supporting on-chain staking has been listed in the US, pioneering a new model of "staking + dividends."

• The CLARITY Act has entered the Senate for review, expected to promote compliance and capital inflow in the U.S. crypto market. The approval of the Solana spot ETF is accelerating, with results expected by October at the latest. The Ethereum staking ETF led by BlackRock and others is under review, and it may be approved in the fourth quarter.

Macroscopic Perspective

In July, the U.S. macroeconomic landscape continued to exhibit a pattern of both inflation rebound and weakening growth momentum. Inflation is still distant from the 2% target, and policies remain cautious. The labor market is experiencing marginal cooling, consumption is warming but the foundation is unstable, and combined with geopolitical and policy uncertainties, these factors continue to impact market sentiment.

Inflation remains above target. The annualized CPI in June rebounded to 2.7%, and core inflation rose to 2.9% year-on-year. The adjustment of tariffs has led to an increase in imported costs, with price increases particularly evident in the service sector. Several officials emphasized that the data does not yet support an immediate shift to easing, and the persistence of core inflation remains to be confirmed, with short-term policies primarily focused on "stability."

The labor market is stabilizing but cooling marginally. In June, non-farm payrolls added 147,000 jobs, below the average of the past 12 months, and the unemployment rate slightly dropped to 4.1%. Initial claims for unemployment benefits have declined for six consecutive weeks, indicating overall resilience. However, willingness to hire has weakened in some sectors, showing signs of marginal softness.

Consumer rebound is moderate. In June, retail sales rose by 0.6% month-on-month, marking the first increase in nearly three months, with non-essential goods and online consumption recovering positively. However, high interest rates, rising credit costs, and declining savings rates have suppressed mid-to-high-end consumption. Consumers in many regions are conservative towards high-priced goods, and the recovery of travel and accommodation is slowing. The resilience of consumption is under challenge.

The divergence in interest rate policies is intensifying. The market expects that the July FOMC meeting will maintain interest rates unchanged, achieving a fifth consecutive pause in rate hikes. There are increasing internal disagreements on the timing of rate cuts, with some committee members calling for an expedited rate cut to hedge against risks, while others advocate waiting for a more evident decline in inflation. The market anticipates a potential rate cut in September, with the probability of two rate cuts within the year rising.

Geopolitical uncertainty continues. The situation in the Middle East has not significantly eased, and the conflict in Ukraine persists. Although the US and China have resumed dialogue, key issues still remain in disagreement. There is increasing skepticism within the United States regarding the independence of monetary policy, putting pressure on policy credibility. Under the combined effect of internal and external risks, corporate investment confidence is affected, and market risk appetite is under pressure.

Outlook: The U.S. economy is in a stage of multiple forces competing against each other. Inflation has not met expectations, employment is weakening marginally, consumer recovery is fragile, and policy signals are unclear. The Federal Reserve will continue to anchor its decisions on data in the short term and maintain a cautious observational stance. The market is paying attention to core data for August-September and geopolitical risks. If the data supports a continuous decline in inflation and increases employment pressure, the Federal Reserve may start cutting interest rates in the fall.

crypto market Overview

In July, the trading volume of the crypto market significantly increased, averaging $161.2 billion daily, up 56% month-on-month. Two rounds of concentrated trading volume occurred from July 11-18 and 21-25, with daily trading volumes breaking $200 billion multiple times, reflecting a large influx of capital and rising sentiment. With BTC reaching new highs and ETH leading strongly, the market is in an upward cycle, structural opportunities are being released, and investors' risk appetite is increasing.

As of July 28, the total market capitalization of cryptocurrencies rose to $3.94 trillion, an increase of 16.2% month-on-month. BTC's market share stands at 60.6%, while ETH has risen to 11.8%, with the ETH/BTC exchange rate climbing to 0.32, indicating ETH's outperformance over BTC. On July 22, the total market capitalization broke the $4 trillion mark for a new high, and since July 11, the growth rate has accelerated, reflecting the influx of funds and the restoration of confidence driven by the rise of mainstream assets. The expansion of market capitalization exhibits structural characteristics, suggesting that the overall market has entered a new upward cycle.

The popular tokens launched in July are concentrated in infrastructure projects, with Layer 1 and Layer 2 being the most popular, such as Chainbase, ZKWASM, Caldera, and ERA. DeFi projects like Aspecta have also gained attention. Overall, it shows that the market places dual importance on underlying technology and the DeFi ecosystem, with infrastructure projects favored, and DeFi remaining an important growth driver.

On-chain Data Analysis

In July, the net inflow of BTC spot ETFs was $20.15 billion. The BTC price steadily rose from $107,172 to $119,451 during the month, an increase of 11.46%. The strong inflow of ETF funds drove the total net assets from $13.13 billion to $15.145 billion (+15.35%).

In July, ETH spot ETF net inflow was $10.71 billion. ETH performed well, with the price soaring from $2,486 to $3,874, a monthly increase of 55.83%. The ETF attracted a large amount of capital, with total net assets jumping from $995 million to $2.066 billion (+107.64%), reflecting strong market confidence in the Ethereum ecosystem.

In July, the total circulation of stablecoins surged by $9.617 billion (+4.14%), reaching $241.38 billion. USDE led the way with a growth rate of 36.2% (an increase of $1.9 billion), while USDT (+$5.55 billion) and USDC (+$2.13 billion) contributed significantly to the increase.

Mainstream Currency Price Analysis

BTC has repeatedly attempted to break through $120,000 this week but has failed. After reaching a high of $120,113 on July 23, it retraced to $114,759. The current price is around $119,600, still hovering below the 20-day moving average (approximately $116,300). Technically, it is attempting to build a bottom in the range of $110,530 to $116,000. If it successfully rebounds, it will increase the possibility of challenging $123,000 again. Failing to hold $110,530 may trigger a drop to the psychological level of $100,000.

ETH shows strong momentum, rising from $3,740 to $3,881 in the past two days, with a daily increase of 3-4%, leading BTC and SOL. ETF net inflows reached $2.4 billion within six days, far exceeding BTC. Technically, it is currently attacking the key resistance point of $3,745, and a breakthrough may lead to a challenge of $4,094, opening a path towards $4,868. A drop below $3,500 or the 20-day moving average (approximately $3,234) could trigger a correction.

The trend of SOL is weak, having dropped below $200 and retraced to $184. It is currently hovering in the $190-$187 range, forming an inverse head and shoulders or cup and handle consolidation. A breakout above the $180-$188 resistance level could reverse towards $220; a drop below the $176 support could accelerate the pullback to $157. SOL is lagging behind ETH and BTC, with low market enthusiasm, and long-term holders show signs of reducing their positions, still in an adjustment pattern.

Hot Events of the Month

1. Several US stock companies continue to increase their holdings of ETH and stake on-chain, building an "Ethereum version of MicroStrategy." SharpLink holds 358,000 ETH, becoming the largest institutional holder in the world, while Bitmine plans to increase its ETH allocation ratio to 5%. ETH is transforming from a retail-driven technological asset to an institution-led reserve asset, entering a new narrative cycle of "staking + reserve + governance."

2. The U.S. "GENIUS Act" has passed, becoming the first federal regulation for stablecoins. The bill establishes issuance qualification requirements and excludes stablecoins from securities and commodities laws, with oversight by banking regulators. The market subsequently saw a significant rebound, with major crypto assets surging, and financial institutions accelerating the issuance of stablecoins or exploring on-chain payment solutions.

3. The first Solana ETF (SSK) that only allows staking will be listed in the United States. The fund allocates 60% of its assets to on-chain staking, with an annualized return of approximately 7% paid out as cash dividends. As a result of this news, SOL experienced a brief increase of 6%. Institutions such as Grayscale have submitted applications for a Solana Spot ETF, and the SEC is expected to complete its review between August and October.

Outlook for Next Month

1. The CLARITY Act has entered the Senate for review, and if passed, it will enhance regulatory certainty, encourage compliant operations, weaken SEC regulatory authority, and confirm the legal status of DeFi. This could drive a new round of compliance and capital influx into the US crypto market.

2. The approval process for Solana spot ETFs is accelerating, with seven institutions having submitted applications. The SEC is expected to make a decision by October 10 at the latest, but it may approve them as early as August. If approved, Solana will become the third mainstream crypto asset to receive spot ETF support, following Bitcoin and Ethereum.

3. BlackRock and others have submitted applications for an Ethereum staking ETF, aiming to earn returns by staking ETH holdings through a custodial service. The SEC has released guidelines to clarify the regulatory process, and the first batch of ETH staking ETFs is expected to be approved as early as the fourth quarter of 2025.