Macro Research: Selling Pressure Easing, Bitcoin Poised to Strengthen Uptrend
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Macro Research: Selling Pressure Easing, Bitcoin Poised to Strengthen Uptrend
Over the past week, the market successfully absorbed whale sell-offs and reached resistance levels. Weak U.S. economic data boosted rate cut expectations, while Federal Reserve Chair Powell delivered dovish signals.
Navigating Web3 tides with focused insightsOver the past week, the market successfully absorbed selling pressure from large holders and reached a key resistance level. How will the market evolve next? Recently, weak U.S. economic data has boosted expectations for interest rate cuts. Federal Reserve Chair Powell delivered dovish signals during two consecutive days of congressional testimony, while the U.S. economy has shown signs of slowing. With spot Ethereum ETFs nearing approval, Bitcoin resumed its upward trend this week, rebounding after an initial test of the $53,000 level. Market participants are once again calling for an altcoin rally. We believe that if Bitcoin can stabilize above the $60,000 mark, it will restore market confidence and could potentially retest the $70,000 high in the short term.
Macroeconomic Environment
U.S. Unemployment Rate Rises Sharply
In June, U.S. nonfarm payrolls increased by 206,000, down 12,000 from the previous month and slightly above Bloomberg's consensus estimate of 190,000. Employment figures for April and May were revised downward by a combined 110,000. Hourly wage growth slowed by 0.1 percentage point to 0.3%, in line with expectations. The unemployment rate rose more than expected to 4.1%. Weakness in service-sector employment weighed on private-sector job growth, while government hiring improved. The June jobs report suggests that U.S. economic momentum in Q2 may have slowed to near its potential growth rate and could continue weakening ahead.
Increased Expectations for Fed Rate Cuts
Fed commentator Timiraos noted that current rate-cut expectations appear more credible. Last year’s rationale for rate cuts became questionable as inflation rose and the economy remained resilient in Q1. This week, Powell returned to Congress, laying further groundwork for potential easing. Provided CPI data does not show a sharp rebound, a September rate cut appears highly likely. Markets have already begun pricing this in, with odds of a September cut now stable at over 70%, as traders position for it to be the starting point.
Market Conditions and Outlook
This week, market selling pressure continued to ease, and Bitcoin (BTC) prices began trending upward, driving broader market strength. On July 15, spot Ethereum ETFs may be approved, providing near-term support for market sentiment. As a result, the Bitcoin Fear & Greed Index has gradually improved.
Bitcoin’s recent performance has mirrored that of the S&P 500, regaining relative strength. As we highlighted last week, once selling pressure subsides, significant buying opportunities emerge in the short term.
Promising Sectors
1) Bitcoin Layer 2 Ecosystem
Highlight: UNISAT Product Launch
On July 7, UniSat announced a major update to its Swap product. Most of the engineering work on the Swap module is complete, with remaining efforts focused on assisting indexers in effectively identifying and calculating records related to the module. The team has also expanded Bitcoin via the FractalBitcoin method and expressed strong confidence in delivering FractalBitcoin by September. On FractalBitcoin, an official product called FractalSwap will be offered, featuring functionality identical to the mainnet swap module, ensuring projects on FractalBitcoin enjoy strong liquidity from day one. In future iterations, BTC and other mainnet assets will also exist as wrapped brc-20 assets on FractalBitcoin, offering greater flexibility.
Next Phase Market Outlook
The emergence of inscriptions represents the first historical opportunity to earn transaction fees through Bitcoin mining rather than relying solely on fixed block rewards—a development of great significance for sustaining the Bitcoin ecosystem. If weaker labor data continues this week, Bitcoin Layer 2 projects may outperform Bitcoin itself in the near term.
2) Ethereum Ecosystem
Highlight: Imminent Approval of Spot Ethereum ETF
An Illinois court has ruled that Ethereum is a commodity, clearing a key regulatory hurdle for spot Ethereum ETF approvals. The market anticipates that the SEC may approve ETH spot ETFs as early as July 15. Positioning within the Ethereum ecosystem now could yield significant returns.
Selected asset list:
Uni (Uniswap): Uniswap is a decentralized trading protocol that enables cryptocurrency trades through automated market makers (AMMs), eliminating the need for traditional centralized exchanges.
LDO (Lido): Lido is a decentralized Ethereum 2.0 staking service that allows users to stake ETH into Ethereum’s Beacon Chain while receiving stETH tokens pegged 1:1 to ETH.
Ethena (ENA): Ethena is a synthetic dollar and internet-native yield platform built on the Ethereum blockchain. Through delta-neutral hedging, it provides a stable synthetic dollar, USDe.
User Interest
1) Twitter-Popular Tokens
$IO
IO.NET is an open-source, cross-platform network communication library designed for high-performance asynchronous networking on the .NET platform. It offers a clean and powerful way to handle network communications, supporting protocols such as TCP, UDP, and Unix domain sockets—ideal for building various network applications and services.
On July 5, @maid_crypto posted on X: "Insiders at IO dumped 2.5 million IO tokens."
An official representative from IO.NET, @TheAntiApe, clarified: "This FUD is incorrect: 1. The contract in question is the Q3 airdrop contract from Streamflow. Community rewards of 2.5 million IO and remaining GPU rewards are held in separate contracts, which is why this contract shows a total of 2.5 million. 2. The link shared by @maid_crypto filtered out transactions below 10,000 tokens; removing the filter reveals all small withdrawals from the contract."
$SD
Stader is a non-custodial, smart contract-based staking platform designed to simplify discovery and use of staking solutions. Stader is building essential staking middleware infrastructure across multiple PoS networks to serve retail crypto users, exchanges, and custodians. Its mission is to streamline staking and deliver optimal risk-adjusted returns for delegators. Stader envisions a future where its staking-powered DeFi foundation unlocks a new world of staking derivatives.
Major exchanges have already initiated its listing process.
2) Popular DApps
Layer3
Layer3 is a protocol creating a liquid attention marketplace across EVM, Solana, and Cosmos. Since launch, Layer3 has facilitated 96 million interactions and introduced the L3 token. L3 holders can participate in governance and staking. An initial airdrop will occur in summer 2024, with a total supply of 300 million and 5% allocated to the airdrop. Community allocations account for 51%. The Layer3 Foundation will release full tokenomics and distribution schedules. Governance empowers holders to manage the protocol, with 51% of the supply dedicated to the community.
Summary
Over the past week, the market successfully digested whale selling pressure and reached a key resistance level. Weak U.S. economic data has strengthened expectations for rate cuts, with Fed Chair Powell signaling dovishness. With spot Ethereum ETFs nearing approval and Bitcoin resuming its uptrend, a sustained break above $60,000 could restore market confidence and pave the way for a return to $70,000 in the near term.
In terms of high-potential sectors, Bitcoin Layer 2 projects like UniSat have rolled out major updates, and the rise of inscriptions plays a crucial role in sustaining the Bitcoin ecosystem. The imminent approval of spot Ethereum ETFs presents a significant market opportunity.
From a user perspective, IO.NET and Stader remain popular on social media, while the DApp Layer3 is worth watching.
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