Macroeconomic pressures and weak capital have led the market into a defensive consolidation phase.

Recently, the uncertainty in the macro environment has increased, suppressing market risk appetite. The expectation of a delayed rate cut by the Federal Reserve, coupled with rising tariffs and geopolitical risks, is putting pressure on the market. Although the momentum of funds has seen marginal recovery, the structural differentiation is evident. The issuance of stablecoins has been moderate, and the premium rate of USDT in the over-the-counter market has declined, reflecting a cautious attitude towards funds.

In terms of the mainstream coin market structure, Bitcoin remains relatively strong but with weakening momentum, while Ethereum shows signs of weakness and bottoming out, with the ETH/BTC ratio continuing to weaken. The altcoin market is experiencing liquidity exhaustion, with risks continuing to release, TOTAL2 and TVL indicators declining in sync, and the market capitalization share of OTHERS breaking down.

In the current situation, it is recommended to maintain a defensive position allocation. Pay attention to the strength and weakness turning point signals of Ethereum and the rhythm of capital inflow, and consider allocating to high beta assets when the timing is right.

Macro and Market Environment Analysis

1. Inflation caused by tariffs may delay the interest rate cut process, exerting pressure on Bitcoin prices in the short term.

2. The appreciation of the yen has caused fluctuations in global markets, which may lead to a short-term correction in Bitcoin.

3. If certain cryptocurrency policies fail to be implemented on time, Bitcoin may also face adjustment risks.

Capital Flow and Mainstream Cryptocurrency Market Structure

External capital flow:

• An ETF saw an inflow of $2.8 billion this week, with a significant increase in inflow.
• Stablecoins increased by 2.3 billion this week, with an average daily increase of 321 million, remaining at a high level.

Market Sentiment Indicator:

• OTC Premium: The premium for stablecoins continues to rise slightly.

Bitcoin(BTC):

• Technical Aspect: The market is in a fluctuating upward range.
• On-chain chip distribution: chips over $103,000 are enhanced

Ethereum ( ETH ):

• The trend is weaker than BTC, ETH/BTC maintains oscillation, and funds continue to flow back to BTC.
• On-chain changes: The increase in active addresses may indicate that a phase of bottoming out has been completed.

Macroeconomic Review

1. US Debt and Fiscal Deficit

• Current situation: The US debt size is 36 trillion dollars, interest expenditure is 880 billion dollars, and there will be an additional 3 trillion deficit over the next 10 years. Moody's downgrade of the US rating has raised market concerns.
• Impact: High debt weakens long-term confidence in the dollar, and investors may turn to safe-haven assets like Bitcoin. In April 2024, debt concerns have driven up the price of Bitcoin.

2. Federal Reserve rate cut expectations

• Market Expectations: The expectation for interest rate cuts has strengthened in the second half of 2025. A 1% rate cut could save over $100 billion in interest expenses.
• Impact: Interest rate cuts increase liquidity, which is beneficial for risk assets like Bitcoin. After a 50 basis point rate cut in September 2024, the long-term upward trend of Bitcoin is evident.

3. U.S. Dollar Trend

• Current Situation: The US dollar weakened in May, but is expected to stabilize in the second half of the year. The US dollar index reached a two-year high in December 2024.
• Impact: The US dollar is negatively correlated with Bitcoin; a weaker dollar is favorable for Bitcoin. If the dollar stabilizes, Bitcoin will face short-term pressure; if confidence in the dollar declines, Bitcoin will rise in the long term.

On-chain Data Analysis

1. Stablecoin capital flow: This week, an additional 1.005 billion was issued, a week-on-week increase of 82%, with an average daily increase of 143 million. The trend of capital return is gently recovering, but it remains cautious.

2. ETF Capital Flow: This week saw a net outflow of $697 million, a decrease of $1.368 billion compared to the previous week, reflecting a cautious attitude from institutional investors.

3. Off-exchange premium/discount: The premium rates of USDT and USDC have both fallen below 100%, entering the discount range, marking a low point in recent months, indicating weak market liquidity.

4. Institutional Dynamics: A large institution has recently significantly slowed its Bitcoin purchases, shifting from previous large-scale buying to cautious accumulation, reflecting a more conservative attitude towards the current market.

5. Address Analysis: The supply from long-term holders continues to rise, reaching a nearly six-month high, indicating increased confidence from long-term investors. The supply from short-term holders has recently seen a slight rebound, possibly reflecting that some short-term traders are starting to buy the dip.

Overall, the market may maintain a fluctuating consolidation trend in the short term. The liquidity and market sentiment are not performing well, and attention should be paid to the purchasing power of institutions and whether the performance of altcoins can reignite market enthusiasm. It is recommended that investors remain cautious, pay attention to rebound opportunities while managing risks effectively.