HTX DeepThink: With inflation improving and rate cut expectations rising, why is the crypto market still under pressure?
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HTX DeepThink: With inflation improving and rate cut expectations rising, why is the crypto market still under pressure?
Focusing on macro liquidity and market structure changes, analyzing the supporting factors behind Bitcoin's resilience and the potential systemic risks in altcoins.
Navigating Web3 tides with focused insights
In early June, the crypto market faces a delicate situation marked by concurrent policy tailwinds and tight liquidity. Despite persistently cooling core inflation and rising rate cut expectations, high-beta assets continue to face near-term pressure.
In this edition, HTX Research's Chloe (@ChloeTalk1) examines macro liquidity flows and shifts in market structure, analyzing the support behind Bitcoin’s resilience and systemic risks lurking within altcoins.
Elevated Geopolitical Risks: Gold and Oil Rise Together
Last week, Trump announced an increase in import tariffs on steel and aluminum from 25% to 50%, with plans to extend these tariffs to critical mineral resources. The EU responded strongly, pledging reciprocal countermeasures. Meanwhile, Ukraine launched large-scale drone attacks on Russian air bases, escalating tensions in the Russia-Ukraine conflict and heightening geopolitical risks. Amid this backdrop, market risk aversion has notably increased, pushing gold prices higher. Despite OPEC+ announcing a production hike of 411,000 barrels per day starting in July, oil prices also rose due to supply concerns and ongoing geopolitical tensions.
Core Inflation Cools, Expanding Room for Fed Dovish Shift
April's PCE data came in stable, with core PCE year-over-year declining to 2.5%, the lowest since 2021, indicating inflation is gradually approaching the Fed’s long-term target. Additionally, real personal consumption expenditures slowed sharply from 0.7% to 0.1% month-on-month, showing clear signs of weakening domestic demand—consistent with a “soft landing” scenario. Federal Reserve Governor Waller noted that even though tariff policies may exert short-term inflationary pressures, rate cuts remain possible within the year. Market consensus now points to September as the likely window for the first rate cut in this cycle.
Bond Market Warns: Yields Rise to Key Highs
Despite dovish inflation readings, U.S. Treasury yields moved upward, with the 30-year yield reaching 5%, nearing its 2023 peak, while the 10-year yield approached 4.6%. This was driven by concerns over fiscal deficits linked to proposed tax cut legislation in Congress, as well as selling pressure in overseas bond markets—particularly Japanese government bonds—that spilled over into the U.S. The strong capital absorption effect of the bond market is weighing on risk assets, constraining upside potential for high-beta assets like Bitcoin.
Hold Majors, Avoid Alts
Bitcoin currently finds itself in a "policy-friendly but liquidity-tight" phase. On one hand, favorable developments abound: progress in stablecoin regulation, the Token Taxonomy Act, and tax exemption proposals; sustained institutional BTC accumulation continues to provide structural support. On the other hand, elevated U.S. Treasury yields and replenishment of the Treasury General Account (TGA) are pressuring liquidity, making a strong breakout unlikely in the short term—increasing the probability of range-bound trading.
On-chain data shows approximately 89% of Bitcoin’s short-term holders remain in profit, nearing historical highs, suggesting mounting profit-taking pressure. Meanwhile, around 70% of long-term holders are still profitable, reflecting a relatively solid holding structure. At the same time, the MVRV Z-Score has risen to around +1.6, indicating optimistic but not overheated sentiment. In derivatives markets, open interest remains elevated above $23 billion, signaling persistent inflow of leveraged capital. Funding rates stay positive, and options skew indicates growing hedging demand against downside risk. Overall, while BTC remains within a mid-term bullish framework, concentrated short-term positioning and high leverage are elevating volatility. Future direction will likely depend on clearer macro signals. For altcoins, their high volatility and lack of structural support imply a greater risk of systemic correction compared to major cryptocurrencies.
Note: This article does not constitute investment advice, nor any offer, solicitation, or recommendation regarding investment products.
About HTX DeepThink
HTX DeepThink is a thought leadership column crafted by Huobi HTX, focusing on global macro trends, key economic data, and major events in the crypto industry. It aims to inject fresh insights into the market and help readers “find order in chaos” amid the ever-changing world of cryptocurrency.
About HTX Research
HTX Research is the dedicated research arm of HTX Group, conducting in-depth analysis across cryptocurrencies, blockchain technology, and emerging market trends. It produces comprehensive reports and expert assessments, committed to delivering data-driven insights and strategic foresight. HTX Research plays a pivotal role in shaping industry perspectives and supporting informed decision-making in the digital asset space. With rigorous methodologies and cutting-edge data analytics, HTX Research remains at the forefront of innovation, leading thought leadership and fostering deeper understanding of evolving market dynamics.
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