Under the influence of geopolitical situations, the recovery of funds is limited, and the market is consolidating at high levels.

Recent geopolitical turmoil has intensified market volatility. Israel's military actions against Iran have triggered a brief risk-off sentiment, leading to a decline in market volatility. At the same time, expectations for a rate cut by the Federal Reserve have strengthened, but overall market sentiment remains cautious and wait-and-see.

On the funding side, although there has been some recovery, the momentum is insufficient. Cryptocurrency ETFs have seen a return of net inflows, but the growth rate has slowed. The growth rate of stablecoin issuance has fallen back, and the premium on USDT has also weakened, indicating that the willingness to enter the market is not strong.

The performance of mainstream cryptocurrencies is diverging. Bitcoin encountered resistance and pulled back after a surge, while Ethereum weakened in momentum after a rebound. Some institutional investors continue to increase their holdings, and the overall market structure is leaning towards neutrality and strength.

Although the liquidity of small market cap tokens has improved, it is still facing resistance in its upward movement. The TOTAL2 indicator rebounded and then retraced again, while the market cap ratio of OTHERS has stopped declining and is fluctuating. On-chain indicators show that it has not yet emerged from weakness.

The market is currently at the end of a consolidation phase, and short-term attention should be paid to the breakthrough of capital. At the same time, it is necessary to patiently observe whether the structure of small-cap tokens strengthens and if there are signs of capital flowing back into mainstream coins.

Macroeconomic Environment Analysis

The recent Federal Reserve meeting was generally neutral, maintaining the expectation of two rate cuts within the year. However, due to factors such as tariffs, upward revisions in inflation, and downward revisions in economic forecasts, the path for rate cuts may be more cautious.

Due to oil prices, the implementation of tariffs, and a low base from the same period last year, the Federal Reserve is unlikely to cut interest rates in the short term. It is expected that after mid-August, after assessing the impact of tariffs and the trend of oil prices, September may be the first rate cut point. By the end of the year, the core inflation rate may rise to around 3.0%.

Capital Flow and Market Structure

In terms of external capital inflow:

• This week, ETFs have seen a net inflow of $2.8 billion, which is a large inflow.
• The issuance of stablecoins increased by 2.3 billion this week, with an average daily issuance of 321 million, which is at a relatively high level.

Market Sentiment Indicator:

• The premium for off-market stablecoins has risen.

The technical side of Bitcoin is in a fluctuating upward range, with increased chip strength above $103,000.

Ethereum's performance is weaker than Bitcoin, with the ETH/BTC ratio maintaining fluctuations and funds continuously flowing into Bitcoin. On-chain data shows an increase in active Ethereum addresses, which may indicate that a temporary bottom has formed.

Overall, the current market is in a high-level consolidation phase, and attention still needs to be paid to breakthroughs in capital flow and structural opportunities in altcoins in the short term. In the medium to long term, it is necessary to closely monitor the impact of macroeconomic conditions and policy changes on the market.