#夏日创作营 Multiple factors intertwined, the market falls into a dilemma game

1、Core variable: the Fed’s FOMC policy statement sets the tone for the whole market
The FOMC meeting of the Federal Reserve scheduled for July 28–29 is the key compass for today’s crypto market—and even global risk assets. All market fluctuations are unfolding around expectations for this meeting. According to CME “FedWatch” data, market expectations are clearly divided: the probability that the Fed will keep interest rates unchanged in July is 63.7%, while the probability of cumulative hikes of 25 basis points is 36.3%. The implied probability of a rate hike in the interest-rate futures market remains around 36% as well. The market’s mainstream expectation is for the Fed to keep the policy rate unchanged in the 3.50%-3.75% range, but recent inflation risks stemming from a rebound in energy prices mean the risk of further hikes has not been fully cleared. If an unexpected rate hike occurs, U.S. Treasury yields and the dollar would likely rise in tandem, tightening global risk-asset liquidity and directly intensifying BTC and ETH’s short-term volatility, even triggering a deep pullback. Conversely, if a more dovish tone is released and rate-cut signals emerge, the crypto market may see a liquidity inflection point.
2、Traditional market linkage: tech stocks collapse spills over—crypto signals decoupling for now
This broader market pullback cannot be separated from drag from traditional tech sectors. U.S. stock leader NVIDIA plunged more than 5% intraday, dragging down the entire semiconductor and AI tech segment. The market is concerned that cyclical financing pressure in the technology industry is increasing, compounded by competitive pressure from China’s semiconductor firms, causing global tech risk appetite to cool rapidly.
What’s worth noting is that the crypto market is showing resilience: amid broad pressure on tech stocks, BTC at one point held steady and oscillated around the $65,000 level. Several market participants analyze that digital assets are increasingly decoupling at the margin from traditional risk assets. The prior strong linkage—“when U.S. stocks fall, crypto coins also fall”—is gradually weakening, which is the market’s most important hidden positive right now.
3、Geopolitical tailwinds fade; oil price plunges weigh on risk sentiment
Recently, the U.S. and Iran launched in-depth negotiations. The U.S. has paused airstrikes against Iran, and tensions in the Middle East quickly cooled down geographically, directly causing a sharp pullback in international oil prices. Brent crude dropped 8.7%, closing at $88.36 per barrel; WTI crude fell 7.5% to $82.61 per barrel. The rapid disappearance of geopolitical risk premia has forced a reshuffle of global risk-asset pricing logic. Crypto assets that had benefited from geopolitical safe-haven sentiment in the past have lost near-term support, becoming an important driver behind this round of market weakness.
4、ETH’s unique structural positive: bearish news landing hides an opportunity against the trend!
Compared with BTC’s broad-based pressure, ETH is currently showing a clear “price-volume divergence” and “sentiment divergence” pattern, hiding upside reversal potential:
First, ETF capital flows run counter to the trend, with net inflows. The latest reporting period for the spot Ethereum ETF shows net inflows of over $103.9 million. Its performance has been far better than that of spot Bitcoin ETFs over the same period, breaking the previously weak funding situation seen for months, as institutions continue to add to their ETH positions and build allocations;
Second, rotation signals appear. The ETH/BTC exchange rate has broken out of a long-term downward channel and is approaching the 0.030 threshold, implying that market funds are rotating from Bitcoin to Ethereum. Historical data shows that after this type of signal appears, the altcoin market often sees a broad-based upswing;
Third, on-chain fundamentals keep improving. Although ETH’s price has been cut roughly in half over the past year, network activity has kept rising and transaction costs have continued to decline. The severe divergence between price and fundamentals leaves room for a valuation correction going forward;
Fourth, circulating supply keeps shrinking. Top institutions are continuously increasing their ETH holdings and staking it at large scale; about 85% of staked tokens have exited the circulation market. Each year, they can generate stable staking rewards. A long-term contraction in circulating supply will support coin prices.