‘Crypto Week’ stalls as rally stumbles

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This week saw a balancing act between macroeconomic pressures and investor optimism. Markets are digesting stubborn US inflation, mixed signals from China, and improving sentiment in Europe - all of which set the tone across equities and crypto.

US inflation data has tempered expectations of an early rate cut, with the Fed’s preferred measure remaining sticky and reinforcing expectations of a prolonged high-rate environment. In Europe, sentiment indicators are rising. China’s GDP beat expectations, though soft consumer demand continues to weigh on risk appetite.

For crypto, global investors are closely watching every macroeconomic signal, especially those related to inflation, international trade, and central bank policy. The market remains poised, with Bitcoin holding above key resistance and institutional flows offering a safety net.

State of Crypto

• Bitcoin rallies to new highs, but ‘Crypto Week’ underwhelms
• Crypto regulation stalls in US as internal GOP rift deepens
• ETH strength builds as ETF inflows surge, altcoin season looms
• Altcoins gain ground as DeFi, stablecoins and ETF hype fuel interest
• Institutional demand grows as ETFs lead amid steady market trends

Bitcoin rallies to new highs, but ‘Crypto Week’ underwhelms

Bitcoin smashed through its previous all-time high this week, hitting US$123K, fuelled by both technical momentum and aggressive ETF inflows.

This leg of the rally is driven more by institutional demand than retail euphoria. On July 15th alone, Bitcoin spot ETFs recorded US$1.17B in net inflows. One of the largest daily totals on record.

Wallets holding less than 100 BTC are absorbing US$2.3 billion per month. This is outpacing miner issuance, which sits at US$1.64B per month, suggesting a net supply deficit. As exchange reserves decline and more coins are moved into cold storage, this dynamic creates a strong backdrop for continued upward pressure.

Bitcoin technical overview

Bitcoin continues to show a strong bullish structure. On the 4-hour chart, price action confirms a breakout above descending resistance, now retesting that level as support. Momentum has cooled slightly, with the RSI dipping from overbought levels (70 → 57), suggesting potential consolidation near current highs around US$119K. EMA (Exponential Moving Average) crosses remain bullish, with the 12/26 EMAs stacked positively and price holding well above the 50and 200-day moving averages.

On the daily chart, the longer-term trend remains intact. Bitcoin is trading above all key moving averages. Strong historical support sits between US$105K-US$108K, aligned with the 200-day MA and prior consolidation zones. RSI remains elevated (70), signalling momentum strength, though traders should watch for exhaustion or potential bearish divergence.

Overall, the structure remains broadly bullish but extended. Short-term traders may eye a retest of the US$115K-US$116K support zone, with longer-term holders still in control.

Capital rotates: Bitcoin loses ground to Ethereum and DeFi tokens

Bitcoin dominance has slipped to 62.97%, down from above 65% a week ago. This suggests capital is rotating into altcoins, particularly Ethereum, Solana, and high-cap DeFi tokens. A falling dominance trend is typically associated with more speculative sentiment. Combined with increasing ETH ETF inflows, traders may be positioning for a broader risk-on move. However, Bitcoin remains the benchmark asset, and sharp reversals in dominance are common during uncertain macro weeks. For now, dominance trends point to potentially expanding opportunities in the altcoin sector.

Crypto regulation stalls in US as internal GOP rift deepens

Progress on US crypto legislation has been derailed once again, with House Republicans unable to unify behind three key bills: the GENIUS Act, the CLARITY Act, and a proposal to ban the Federal Reserve from issuing a central bank digital currency (CBDC). Despite expectations of momentum this week, a procedural vote required to begin formal debate collapsed, as more than half a dozen Republicans sided with Democrats to block the motion.

The deadlock appears to stem from last-minute changes to the bills, particularly the removal of a CBDC ban that some conservative members believed had been agreed upon. Frustration within the party has mounted, with some original sponsors of the legislation now withdrawing their support due to the perceived lack of transparency in negotiations.

Former President Donald Trump reportedly brokered a verbal deal to unify the party’s conservative wing, but that fragile agreement quickly fell apart. As a result, what should have been a routine vote dragged on for over four hours.

Republican leaders are now exploring alternatives, such as attaching the CBDC ban to a broader defence funding bill. However, the likelihood of passing comprehensive crypto legislation in the near term appears slim. Regulatory uncertainty in the US continues.

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Ethereum strength builds as ETF inflows surge and altcoin season looms

Ethereum (ETH) has reclaimed and held above the key US$3,000 level, supported by strong technicals, growing Layer 2 activity, and increasing institutional inflows into spot ETFs. ETH is currently trading above US$3,300, up over 7% on the week, and showing signs of a broader breakout.

On the technical side, Ethereum remains in an uptrend across both short- and long-term timeframes. It’s consolidating just below recent highs, with the Relative Strength Index (RSI) easing from overbought conditions while maintaining bullish structure. On-chain metrics also look supportive, with Arbitrum and Optimism showing sustained growth in activity, and gas fees remaining relatively low.

What’s driving the move isn’t just market sentiment, it’s capital flows. Spot ETH ETFs have attracted US$5.76 billion in net inflows since launch, with BlackRock’s $ETHA leading the charge at US$6.6 billion in assets. These ETFs now account for nearly 4% of Ethereum’s total market capitalisation, reflecting growing institutional demand.

Altcoins are outperforming Bitcoin, with ETH up 20.7% this week compared to BTC’s 6.3%. XRP, Solana, and Dogecoin are also seeing significant gains. With Bitcoin dominance slipping and macro tailwinds aligning, we may be in the early stages of a broader altcoin cycle, setting the stage for ETH to potentially retest the US$4,000 mark in the near term.

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Altcoins gain ground as DeFi, stablecoins and ETF hype fuel interest

Altcoins are back in focus, with capital rotating toward Solana, XRP, and select meme tokens. Solana (SOL) climbed around 7% this week, supported by growing activity across new DeFi protocols that boosted total value locked (TVL). NFT and meme coin trading also spiked midweek, reflecting a shift in risk appetite.

XRP is showing signs of a more measured recovery. With no immediate regulatory headwinds, market participants are positioning for a potential catalyst, ranging from custody announcements to renewed speculation around a ProShares XRP ETF. XRP recently pushed above the US$3.00 resistance level, triggering fresh optimism and increasing talk of a possible move toward US$5.00.

That said, US$3.40 remains a key technical and psychological barrier, as it marked the previous all-time high. A breakout will likely depend on favourable developments out of Washington, where stablecoins, central to XRP’s longer-term positioning, remain a hot topic in the ongoing Crypto Week discussions in the US House of Representatives.

Investor sentiment remains closely tied to regulatory progress and institutional adoption narratives, with ETFs continuing to act as a major driver of both retail and professional market activity.

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Institutional demand grows as ETFs lead amid steady market trends

Institutional interest in cryptocurrencies continues to strengthen, with exchange-traded funds (ETFs) driving significant capital flows. BlackRock’s $IBIT fund now holds over 700,000 BTC, contributing to total Bitcoin ETF exposure across all providers surpassing US$75 billion.

Last week, Bitcoin spot ETFs recorded a net inflow of US$3.32 billion, raising total assets under management (AUM) to US$149.66 billion. Ethereum spot ETFs also saw robust demand, with US$1.51 billion in inflows, the largest weekly figure since launch, lifting total AUM to US$14.22 billion. This surge coincided with Bitcoin maintaining levels above US$116,000 and Ethereum holding above US$3,000, reflecting strong institutional appetite. ETFs continue to play a critical role in absorbing supply and supporting price stability.

Meanwhile, open interest in Bitcoin futures climbed to US$57.4 billion, indicating rising confidence and capital commitment without excessive leverage, as funding rates remain moderate. On the development front, activity on Ethereum and Solana networks increased by approximately 14% over the past month, boosted by growth in DeFi projects and AI related integrations, signalling sustained innovation and ecosystem expansion.

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Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

Sky News: Bitcoin value sees record high

BTC Markets crypto analyst Rachael Lucas says there is a “deep structural demand” for Bitcoin. Bitcoin has risen to another record high and continues to climb. Ms Lucas told Sky News Australia that it is not just “short-term momentum”.

News.com.au: Frenzy as Bitcoin rewrites history

“The latest leg of the rally appears to be driven by a combination of continued exchange traded fund (ETF) inflows, strong on-chain activity and renewed institutional interest, particularly in the lead-up to expected Fed rate cuts in Q3,” Charlie Sherry, Head of Finance at BTC Markets, said in a statement provided to news.com.au.

The Sydney Morning Herald: ‘Bigger than Amazon’: Trump’s crypto genius is about to hit Aussie bitcoin believers

"Bitcoin has now overtaken silver and Amazon to become the fifth-largest global asset, as investors increasingly see it as a complement to gold. With subdued retail activity, this rally is being led by ETFs, corporates, and long-term holders, not speculation," BTC Markets analyst Rachael Lucas said.

ABC News: Bitcoin breaks through $US120,000 to fresh high but some warn 'bubble' could burst

Rachael Lucas, an analyst at Australian crypto exchange BTC Markets, said the recent rally was a sign of "how deeply embedded digital assets have become in institutional portfolios".

"That's not speculative froth, it's structural demand."

AFR: These art collectors have lost $250k on NFTs. They still love them

“Interest in the asset class is fading, and the speculative premium once attached to this so-called next-gen technology has largely evaporated,” said Charlie Sherry, the head of finance at crypto exchange BTC Markets.

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The week ahead: economic events

Thursday, July 17th

• Japan Balance of Trade
• United Kingdom Unemployment Rate
• US Retail Sales

Friday, July 18th

• Japan Inflation Rate
• United States Building Permits, Housing Starts, Michigan Consumer Sentiment

Tuesday, July 22nd

• Australia Interest Rate
• United States Fed Funds Interest Rate

Wednesday, July 23rd

• United States Existing Home Sales

Source: Trading Economics

Market reflections

• United States: Inflation stays sticky, rate cut unlikely
• Europe: Confidence rebounds, but ECB holds back
• China: GDP beats, but retail demand lags
• Japan: Yen slips amid persistent dovish stance

United States: Inflation stays sticky, rate cut unlikely

CPI and Core CPI came in hotter than expected, making a July rate cut increasingly unlikely. The Fed remains caught between supporting markets and anchoring inflation expectations. As bond yields rise, crypto continues to appeal as a non-correlated asset.

Europe: Confidence rebounds, but ECB holds back

Germany’s ZEW Index climbed to 52.7, surprising to the upside. Confidence in the banking sector and energy resilience are key tailwinds. While the ECB remains cautious, further rate hikes appear unlikely. A stable eurozone supports reduced volatility for euro-based crypto investors and trading desks.

China: GDP beats, but retail demand lags

China’s Q2 GDP beat expectations (5.2% vs. 4.9%), though consumer spending remains soft. The government is expected to roll out new stimulus measures, particularly for small and medium-sized businesses. Broader liquidity injections and improved export sentiment could indirectly benefit crypto markets (AP News).

Japan: Yen slips amid persistent dovish stance

The Bank of Japan’s dovish stance continues, with mounting pressure on the yen. A weaker JPY often drives domestic investors toward hard assets like BTC. Caution is warranted ahead of the August anniversary of last year’s Japan trade collapse, which triggered a sharp crypto sell-off.

Closing thoughts: Signals strengthen, but risks remain

This week’s macroeconomic landscape presented both headwinds and tailwinds. Inflation remains elevated, geopolitical uncertainty persists, and the pace of recovery in major economies, particularly China and the US, continues to diverge. These factors will remain central to market sentiment as policymakers weigh their next moves.

For crypto markets, the backdrop is cautiously optimistic. Bitcoin’s move above US$120K reflects a maturing asset class, underpinned by ETF legitimacy and institutional capital. Ethereum’s steady rise along with XRP’s and Solana’s resurgence highlight broader ecosystem growth. As adoption expands and supply tightens, institutional momentum continues to support long-term structural strength across digital assets.

Scam alert

Impersonation scams: What to watch out for and how to stay safe

Scammers are impersonating trusted organisations, including banks, crypto exchanges, and government agencies, to trick you into sharing personal or financial information. Some even pretend to be friends or family. They can spoof phone numbers or insert messages into legitimate text threads, making the scam harder to detect.

Warning signs it could be a scam:

• Messages that ask you to click a link and enter login or personal details.
• Urgent requests that pressure you to act quickly to resolve a fake issue.
• Calls or texts that claim to be from a government agency and threaten arrest or legal action.
• Business instructions that ask you to send money to a new bank account or BSB.
• Contacts that say they’ve changed numbers but avoid verifying their identity.

How to protect yourself:

• Avoid clicking links or downloading attachments from unfamiliar sources.
• Confirm the message by contacting the organisation directly using official details.
• Look out for small changes in phone numbers, email addresses, or names.
• Cut contact immediately if someone threatens or intimidates you.
• Verify their identity if someone claims to be a friend or relative with a new number.

A note from BTC Markets:

We’ve recently seen scammers impersonating BTC Markets staff and falsely claiming to be account managers. If you’re ever unsure about a message, please submit a support ticket via our official website, so our team can verify the communication.

If you think you’ve been targeted, contact your bank immediately and update your passwords. You can also reach out to IDCARE at 1800 595 160 and report scams at scamwatch.gov.au.

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