Crypto Assets Market Weekly Review (July 7 to 13): BTC breaks historical high, with a rise of 9.08%

This week, Bitcoin (BTC) performed strongly, starting at $109,217.98 and eventually closing at $119,130.81, with a rise of up to 9.08%. During this period, it reached a high of $119,500 and a low of $105,119.70, with a volatility of 11.04%. It is worth noting that the trading volume increased but at a moderate pace.

This week, the market witnessed a significant increase in on-site fund activity, coupled with strong buying intentions from off-site funds. The two forces resonated, pushing BTC to reach a new historical high. This development confirms previous market expectations that BTC might initiate the fourth wave of this bull market.

However, the market also faces some uncertainties. First is the chaos brought by the potential "peer-to-peer tariff war"; secondly, the job market data exceeded expectations, causing the market's expectations for interest rate cuts to waver. These factors are worth investors' close attention.

Policy Environment and Economic Data

This week's main factors affecting the market are concentrated on tariff policy adjustments and U.S. employment data.

On July 10, a new tariff policy was announced, imposing a uniform tariff of 35% on all imports from Canada starting August 1. Two days later, it was reported that if an agreement could not be reached before August 1, a tariff of 30% would be imposed on Mexico and the EU. Previously, the United States had notified Japan and South Korea that the tariff rate would be set at 25%.

In addition, 23 other countries received a unified notification letter, stating tax rates ranging from 20% to 50%, but each country can negotiate to lower the tax rate before August 1.

Currently, the tariff rates announced for major trading partner countries have exceeded market expectations. At the same time, a tax reform and spending bill worth $3.4 trillion is under deep review in the Senate. It is expected that by the fiscal year 2026, the U.S. deficit rate may climb to 9%. The fiscal expansion policy and inflation pressures caused by tariffs create a "double-edged sword" effect, prompting the market to reassess stagflation risks. Affected by the dual impact of policy uncertainty and strong economic data, the U.S. dollar index rose approximately 0.8% this week. Although long-term concerns have not yet had a noticeable impact on the market, potential risks are accumulating.

The latest data from the Labor Department shows that for the week ending July 5, the number of people applying for unemployment benefits for the first time fell to 227,000, setting a new seven-week low and far better than the market expectation of 235,000. This strong data has led traders to delay expectations for the first rate cut in September again. As of the weekend, FedWatch data indicated that the probability of a rate cut in July has fallen to 5.2%, while the probability for September has risen to 60.4%.

On July 2nd, Federal Reserve Chairman Powell stated at the ECB Sintra Forum that although there is a possibility of a rate cut in July, he has not formally expressed support for it. He emphasized that there remains uncertainty regarding the second-round effects of tariffs on inflation. Currently, there are divisions within the Federal Reserve regarding the issue of rate cuts, with several officials expressing support for a rate cut. This week, the Director of the Federal Housing Finance Agency even revealed the news that "Powell may resign."

Various signs indicate that the contradiction between the government and the Federal Reserve regarding "interest rate cuts" is intensifying. The key issue is whether tariffs will lead to a significant rise in inflation, which will directly impact the decision on interest rate cuts in September. Currently, the US stock market and BTC have already priced in the interest rate cut for September. If there are clear signs of inflation rising, the market may come under pressure, likely leading to a certain degree of downward adjustment, but it is unlikely to change the overall market trend.

Crypto Assets Market Performance

Despite the uncertainties in the macro market that have caused U.S. stocks to hover near historical highs, with the three major indices slightly declining, BTC has risen significantly by 9.08% this week, reaching a new historical high thanks to a substantial inflow of funds both inside and outside the market.

From a technical perspective, the biggest breakthrough for BTC this week is the breakout from the 90,000-110,000 USD range that has formed since last November, which is referred to as the "Trump Bottom". BTC has oscillated within this range for as long as 8 months, making it the third largest consolidation platform in this bull market cycle, with over 30% of BTC experiencing on-chain movement within this range.

The breakthrough in this range is of great significance, marking the official start of the fourth wave of rise in the current bull market for BTC. Based on historical experience, this wave of rise may be completed quickly in a short period of time (possibly two to three months), and it is worth paying close attention to.

BTC broke through the long-term oscillation range, which also activated the bullish sentiment for other crypto assets including Ethereum (ETH), leading to a widespread rise in the market.

Capital Flow Situation

Despite facing new challenges in the global macro environment, strong inflows of funds both on and off the exchange have driven BTC's performance this week far beyond the Nasdaq index, successfully breaking through the "Trump bottom".

This week, a total of $5.886 billion flowed into stablecoin and BTC spot ETF channels, with $2.177 billion flowing into the stablecoin channel and $2.780 billion into the BTC spot ETF channel. Additionally, the ETH spot ETF channel also saw $929 million in inflows, setting a weekly inflow record for this type of ETF since its establishment.

Enterprise-level procurement is also accelerating. As the consensus on the market in the third quarter becomes stronger, the vigorous inflow of funds is unlikely to change the market trend in the short term, and the crypto assets market is revitalizing its bull market style.

Selling Pressure and Sell-off Situation

Since July, as BTC approaches historical highs again, long-term holders have begun to reduce their holdings slightly. This week, after BTC broke the historical high, the reduction of long-term holders officially started, but the scale of the reduction is only over 10,000 coins.

The selling scale of short-term and long-term holders has increased compared to last week, but the main selling pressure comes from short-term traders. Currently, short-term holders have an unrealized profit of about 18%, and selling pressure is gradually increasing, but it remains limited. Due to strong buying power, the overall exchange still shows a net outflow of funds.

The reduction in holdings by long-term holders usually indicates the arrival of a new round of liquidity. With the expectation of interest rate cuts remaining unchanged in September, the willingness of forward-looking trading funds to price upwards remains strong. This is also the reason why we hold a cautiously optimistic view on BTC's performance in the third quarter.

Cycle Indicators

According to eMerge Engine data, the EMC BTC cycle indicator is currently at 0.625, in a rising period.