Analysis of the Independence of the Fed and the Dynamics of the Crypto Assets Market

Market Observation

In the current macroeconomic context, the market is closely monitoring the potential challenges to the independence of U.S. monetary policy. The core focus is on the possibility of influencing or seeking to replace Fed Chairman Powell, which is widely seen as a move that could undermine the foundation of the Fed's independence. Analysts are concerned that if the Fed's independence is compromised, it may prioritize debt costs over inflation targets, leading to the risk of long-term inflation expectations spiraling out of control. Although potential successors emphasize maintaining independence, the market believes that once the chairman can be easily replaced, the credibility of the successor will be significantly diminished.

Wall Street reacted quickly, giving rise to the "Powell Hedge" strategy. Some analysts suggest buying short-term government bonds and selling long-term government bonds to steepen the yield curve, in order to hedge against interest rate cut expectations and inflation risks. There are also strategists who recommend constructing hedges by betting on rising breakeven inflation rates. A chief investment strategist warned that all sell signals have been triggered, the market breadth has deteriorated to historical extremes, but the real breaking point may be if the 30-year U.S. Treasury yield surpasses 5%, or if it repeats the policy errors of the 1970s. At the same time, regulatory changes have also brought uncertainty to the market, as a major bank plans to charge fintech companies that access its customer data, a move that could impact startups in areas such as Crypto Assets.

In this market atmosphere, Ethereum has recently performed strongly, with its price breaking through 3600 USD, driven by three main factors: the positive signals from the U.S. Congress's cryptocurrency legislative process; institutional funds accelerating inflows through channels like ETFs; and the decline of Bitcoin's market dominance, indicating that Ethereum may lead in the upcoming "altcoin season." Analysts believe that Ethereum's strong DeFi and smart contract ecosystem provides solid long-term value support, and suggest that investors closely monitor regulatory dynamics, ETF capital flows, and on-chain indicators.

After reaching a new high last week, Bitcoin closed with a bearish candle, fluctuating in the range of $115,000 to $123,000. There are a large number of buy orders in the $114,000 to $116,000 area, and if it breaks below, it may trigger stop-loss liquidations and dip to $112,000. At the same time, sell orders are accumulating at $119,500 and above $120,000. Some analysts predict the cycle peak may appear in October in the range of $133,665 to $151,539 through complex Fibonacci analysis, while a certain quantitative model shows that every 10,000 BTC increase in ETF holdings could push the price up by 1.8%, thus expecting to reach $140,000 in September. The options market shows significant divergence, with bearish investors laying out put options in the $100,000 to $110,000 range, while bullish investors are constructing a ladder structure with strike prices as high as $190,000.

On the Ethereum front, technical analysis emphasizes that after ETH breaks through the resistance zone of $3,250-$3,500, the short-term target points to $4,000, at which point $331 million in short positions may be liquidated. However, the current RSI of 84.38 indicates an overbought state, warning of potential pullback risks. If ETH can maintain the current support level, the price is expected to rise further; if it breaks down, it may retrace to the range of $2,950--$3,250 to re-accumulate buying momentum. Some analysts point out that ETH is testing the upper boundary of the $3,700-$3,800 channel, and breaking through $4,100 will confirm the acceleration of the bull market, with continuous inflows of institutional funds through ETFs providing fundamental support for this.

Over the weekend, a domestic public chain announced the launch of version 3.0 in August and jointly developed a blockchain SIM card, driving its token to surge 150% to $0.25 in a single day. Its participation in the "Belt and Road" offshore RMB stablecoin pilot may reshape the cross-border payment landscape. In addition, last week, after a certain crypto wallet rebranded, it integrated a new protocol to achieve content assetization minting, stimulating related tokens to rise by 77.7%. Meanwhile, a rapid trading session occurred on-chain within 24 hours, with a certain token's market cap peaking at $27 million, currently at $19 million.

Key Data (as of July 21, 12:00 HKT)

• Bitcoin: $118,604 (Year-to-Date +26.73%), Daily Spot Trading Volume $41.418 billion
• Ethereum: $3,773.44 (Year-to-date +13.13%), Daily spot trading volume is $54.025 billion
• Fear and Greed Index: 72 (Greed)
• Average GAS: BTC: 0.44 sat/vB, ETH: 0.59 Gwei
• Market share: BTC 60.1%, ETH 11.6%
• 24-hour BTC Long/Short Ratio: 49.25%/50.75%
• Sector Performance: NFT sector increased by 6.73%; Meme sector increased by 5.32%
• 24-hour liquidation data: A total of 121,658 people were liquidated globally, with a total liquidation amount of $356 million, including $36.96 million in BTC liquidations, $126 million in ETH liquidations, and $19.81 million in DOGE liquidations.
• BTC Medium to Long-term Trend Channel: Upper Channel Line (117329.45 USD), Lower Channel Line (115006.10 USD)
• ETH Medium to Long-term Trend Channel: Upper Line of the Channel (3309.45 USD), Lower Line of the Channel (3243.92 USD)

ETF Flows (as of July 18)

• Bitcoin ETF: +$363 million
• Ethereum ETF: +$403 million

Today's Outlook

• A trading platform will remove the seed tags for multiple tokens on July 21.
• Trusta.AI (TA) will be launched on a certain trading platform on July 21.
• A trading platform will launch Yala (YALA) on July 22.
• A certain wallet's exclusive TGE Issue 31 will be launched on July 22 at Delphinus Lab (ZKWASM)
• Bittensor (TAO) will unlock approximately 210,000 coins on July 21, worth about $73 million.

Top 100 market cap gains today: Conflux (CFX) up 93.3%, dogwifhat (WIF) up 15.3%, JasmyCoin (JASMY) up 14.9%, Pyth Network (PYTH) up 10.4%, SPX6900 (SPX) up 9.7%.

Hot News

• Data: Tokens such as AVAIL, VENOM, ALT will experience large unlocks, with AVAIL unlocking a value of approximately 18.9 million USD.
• This week's preview | The White House Digital Asset Market Working Group is expected to release its first Crypto Assets policy report on July 22; the Fed is holding a meeting on bank capital.
• This week's macro outlook: "Crypto Assets Week" has come to a perfect conclusion, and Powell will take the stage under heavy pressure.
• Sources: Pump.fun will distribute PUMP airdrop on July 24.
• The giant whale "The White Whale" made nearly 30 million dollars in profits by going long on ETH and SOL in the past week.
• Ethereum rises to last December's high, over 75,000 people liquidated in crypto assets in the past 24 hours.
• The Ohio Public Employees Retirement System increased its holdings of 21,499 shares of Strategy stock in the second quarter of this year.
• Analysis: Last week, some on-chain addresses accumulated 391,000 ETH, worth approximately 1.4 billion USD.
• In the past 7 days, NFT trading volume increased by 29% month-on-month, reaching 159.6 million USD, with Pudgy Penguins trading volume increasing by 247.32%.
• Financial tool platform Aether Holdings plans to raise $40 million, most of which is intended for purchasing Bitcoin.