1. Summary
This week, the trend of Bitcoin was highly correlated with that of the US stock market. After repeatedly testing the support level of $112,000 at the beginning of the week, it was stimulated by Powell's dovish remarks and rose to $117,000 in the short term. However, it fell back to around $113,000 due to pressure over the weekend, with increasing divergence between bulls and bears. On-chain data showed that short-term unwind positions and long-term profit-taking positions formed the main selling pressure. Institutional holdings increased slowly, and Bitcoin spot ETFs experienced continuous net outflows, indicating weak core buying. ETH hit a four-year high driven by optimistic expectations for monetary policy and corporate reserves. Institutional allocation was solid, but corporate reserves could not fully reverse the overall market trend in the long term due to their low-frequency and large-scale characteristics. Since July, the increase in the market capitalization share of Altcoins has mainly been concentrated in ETH itself, with limited capital diffusion. The overall market capitalization of the crypto market has slightly declined, and trading activity still exists, but it lacks sustained incremental capital support, resulting in significant differentiation in market risk appetite.
2. Powell's speech was a disappointment,Expectations for interest rate cuts surged in September
2.1 The credit rating of the United States remains stable, inflation expectations are moderate, and expectations for interest rate cuts in September have surged. It is expected that interest rates will be cut twice within the year
8.19 - Fed's mouthpiece: Overall PCE inflation rate expected to be moderate in July, with year-on-year growth remaining at 2.6%
8.20 - Federal Reserve Meeting Minutes: Most members believe that inflation risks outweigh employment risks, and the overall US economy remains resilient
8.20 - Trump criticizes Powell again, urging the Federal Reserve to cut interest rates
8.20 - Standard & Poor's confirmed the US sovereign rating of "AA+/A-1+", with a stable outlook
8.21 - Fitch confirms the US rating as "AA+", with a stable outlook
8.21 - Fed's mouthpiece: A few officials hinted that they may join the rate-cutting camp in September
8.22 - Fed's Collins: If the outlook for the labor market worsens, it may be appropriate to cut interest rates in the short term
8.22 - Powell delivers a speech at Jackson Hole
CME FedWatch Tool – Fed Meeting Rate Probability Forecast Summary
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MEETING DATE
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300-325
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325-350
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350-375
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375-400
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400-425
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425-450
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2025/9/17
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0.00%
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0.00%
|
0.00%
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0.00%
|
87.33%
|
12.67%
|
|
2025/10/29
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0.00%
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0.00%
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0.00%
|
36.50%
|
63.5%
|
0.00%
|
|
2025/12/10
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0.00%
|
0.00%
|
17.79%
|
82.21%
|
0.00%
|
0.00%
|
2.2 Powell's policy tone: neutral with a dovish tilt;The risk of employment outweighs the risk of inflation
Macroeconomics and Policy Stance: Coexistence of Stagnation and Inflation Risks, Requiring Adjustment of Monetary Stance Based on Changes in Risk Balance
Labor market: The peculiar equilibrium state resulting from a significant slowdown in both labor supply and demand. This indicates that the downside risks to employment are escalating, and the unemployment rate could surge rapidly.
Inflationary situation: The inflationary effect of tariffs is unlikely to be lasting, nor will it lead to an upward shift in inflation expectations.
Monetary policy stance: The baseline outlook and evolving balance of risks may necessitate adjustments to the monetary stance.
Second: The monetary policy framework returns to normalization: a 2% inflation target + a broad maximum employment goal
Inflation Target: Return to a 2% inflation target regime, removing the average phrasing
Employment Objective: Return to a more flexible and broader "maximum employment" objective. Considering the lagging nature of monetary policy, in order to prevent inflation, the Federal Reserve should tighten monetary policy before the labor market enters a tight situation.
3. Equity & Crypto Market Performance
3.1 Powell's dovish stance reignited market sentiment,fueling a broad-based rise in risk appetite.
Amidst the pressure on AI valuation and uncertainty regarding the direction of Powell's speech at the Jackson Hole conference, US stocks experienced a four-day losing streak. However, as Powell signaled a dovish approach, market sentiment swiftly recovered, and major stock indices regained their losses: the S&P 500 inched up 0.27% for the week, while the Nasdaq still declined 0.58%. Conversely, the small-cap index, the Russell 2000, surged 3.30%, significantly outperforming the broader market, indicating a shift in risk appetite towards riskier assets. Simultaneously, the VIX index fell back to around 14.22, signaling a stabilizing overall market sentiment.
NVIDIA's financial report will be released next week. Amidst market concerns about AI valuation, investors may hope to alleviate market worries about AI profitability through NVIDIA's financial report.
Figure 1: Nasdaq & S&P 500 & U.S. Treasury Bond Trends
3.2 The macro environment only provides temporary benefits, Bitcoin has experienced roller coaster-like market fluctuations
During the week, Bitcoin's trend remained highly correlated with the US stock market, with the correlation coefficient with the Nasdaq futures index maintaining at 0.78. At the beginning of the week, it corrected along with the US stock market, testing the support level of $112,000 multiple times. By Friday, spurred by Powell's dovish remarks, Bitcoin quickly rose from $112,000 to $117,000, but it fell back to around $113k due to pressure over the weekend. Overall, BTC fell 3.36% for the week, with its trading range remaining between $110,500 and $117,500. After falling below the support level of $112,000, the next key support level to watch is $104,500.
Figure 2: BTC Price Trends
3.3 Bitcoin‘s dominance is declining, Risk appetite spreads to Altcoins
As of August 24th, the total market capitalization of cryptocurrency assets rebounded to $3.9722 trillion, marking a 1.47% week-on-week decrease. The total trading volume also declined by 10.09% to $1.25281 trillion, with activity still present amidst wide fluctuations in the market. Structurally, Bitcoin's trading volume decreased and its market share dropped to 37.03%. Capital gradually shifted towards Altcoins, reflecting a diffusion of risk appetite. However, the trading volume of Altcoins decreased week-on-week, indicating a lack of sustained incremental capital support.
Figure 3：Trading Volume of BTC and Altcoins
4. Crypto Trend Analysis
4.1 Sell both long-term profits and short-term unprofitable positions,Market divergence emerges
On-chain data shows that approximately 505,000 BTC were transferred this week, indicating a significant increase in on-chain activity:
The reduction of cost chips below 100,000 US dollars amounts to 106,000 chips, and the long-term reduction of profit chips has significantly increased, accelerating the distribution;
The reduction of 40,000 coins in the 103K–110K range has significantly decreased profit-taking, which does not constitute major selling pressure;
The main reduction force is concentrated in the 117K–118K range, with a cumulative reduction of approximately 168,000 units. This range, which was previously a support level, has shifted from being a bottom to a top, creating pressure. The short-term profit-taking has formed the main selling pressure, indicating a cooling down of market sentiment.
Meanwhile, 505,000 new chips were added within the range of $111.9K–$117K, with 174,000 additional chips in the range of $113k–$114k.
Overall, as the BTC price rebounded to 117k, the market turnover rate increased significantly. Long-term profit-taking chips and short-term unwind chips formed the main selling pressure, indicating an increase in bullish and bearish divergences.
Figure 4: BTC Unspent Realized Price Distribution
4.2 Market Summary and Outlook
This week, the trend of Bitcoin was highly correlated with the US stock market. After repeatedly testing the support level of $112,000 at the beginning of the week, it was stimulated by Powell's dovish remarks and rose to $117,000 in the short term. However, it fell back to around $113,000 over the weekend due to pressure, and the divergence between bulls and bears widened. On-chain data showed that short-term unwind chips and long-term profit chips formed the main selling pressure. Institutional holdings slowed down, and Bitcoin spot ETFs continued to experience net outflows, indicating weak core buying. ETH hit a four-year high driven by optimistic expectations for monetary policy and corporate reserves. Institutional allocation was solid, but corporate reserves could not fully buck the overall market trend due to their low-frequency and large-scale characteristics. Since July, the increase in the market capitalization share of Altcoins has mainly been concentrated in ETH itself, with limited capital diffusion. The overall market capitalization of the crypto market has slightly declined, and trading activity still exists, but it lacks sustained incremental capital support, and market risk preference is clearly divided.
Figure 5: BTC Chip Supply Situation
4.3 Institutional shareholding increases have slowed down, coupled with continuous outflows from ETFs, leading to a weakening of market buying momentum
Based on data disclosed by institutions on-chain, physical institutions have cumulatively increased their holdings by 6,414 BTC this week, with listed companies contributing 6,136 BTC, accounting for a whopping 95.67%. However, the overall purchasing momentum has noticeably slowed down. Meanwhile, the net outflow of Bitcoin spot ETFs reached $1.17 billion for the entire week, recording capital outflows for six consecutive days. Even on Friday, when Powell signaled a dovish approach, there was still a net outflow of $23 million, highlighting the simultaneous weakening of core buying power in the market.
Figure 6: BTC Buyer Analysis
4.4 ETH breaks through its all-time high
Driven by optimistic expectations for monetary policy, market risk appetite has significantly expanded, with ETH performing particularly strongly, reaching a peak of over $4,958, setting a new all-time high again after four years, and accumulating a weekly increase of 6.88%. Meanwhile, the ETH/BTC exchange rate rebounded above 0.042, but there is still room for a doubling of the exchange rate from its high of 0.085. Whether the ETH/BTC exchange rate can break through to a new high depends on the purchasing power of ETF funds and reserve strategies of listed companies.
Figure 7: ETH Price Trends
4.5 The demand for ETFs of ETH is solid, The potential demand for reserve strategies is considerable
Following the historic net inflow of $2.85 billion into ETH spot ETFs last week, there was a weekly net outflow of $237 million this week, marking the first occurrence since May 16th. However, the overall outflow remains within a manageable range. Additionally, Thursday and Friday reversed the previous trend, with a cumulative net inflow of $630 million, indicating that institutional interest in ETH allocation remains solid.
As of now, 15 listed companies have announced the implementation of ETH reserve strategies, with BMNR, SBET, and DYNX ranking the top three, with reserve progress of 25%, 74%, and 3% respectively. Overall, the reserve strategy is still in the advancing stage, and the potential new buying demand in the market remains considerable.
Figure 8: ETH Buyer Analysis
4.6 ETH's corporate reserve strategy cannot consistently buck the overall market trend over the long term
However, potential reserve demand does not necessarily translate into a sustained push for ETH prices. Listed companies' reserve of cryptocurrency assets often exhibit low-frequency, large-scale characteristics, and Bitmine's pace of increasing holdings has demonstrated the ability to slow down and regulate during periods of increased market volatility, indicating flexibility in the scale of single purchases and a longer overall reserve cycle (similar to Strategy's five-year BTC reserve process, which also experienced a bear market). This means that corporate reserves are more like a "structural incremental buying order", which can amplify market sentiment and price fluctuations in a bull market, but can only provide limited and temporary support in a bear market, and cannot buck the overall market trend for long.
Figure 9: Bitmine’s ETH Balance
4.7 The proportion of ETH-dominated altcoins has increased, with limited capital diffusion effect
Since the launch of ETH reserves in July, the market capitalization share of altcoins has increased by 7.4% overall. However, excluding ETH, it has only risen by 2.0%, indicating that capital inflows are mainly concentrated in ETH itself, driving a structural upward trend in the altcoin sector. However, the diffusion of capital is limited, and the spread of risk appetite in the market remains concentrated, with a comprehensive altcoin market situation yet to be formed
Figure 10: Altcoin_Cap_Ratio
5. Regulatory Trends
America
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The Federal Reserve terminates its regulatory project targeting cryptocurrencies and distributed ledger technology
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The Chairman of the U.S. Securities and Exchange Commission (SEC) stated that only a minority of cryptocurrency tokens are securities
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Chairman of the U.S. Securities and Exchange Commission (SEC): The SEC will immediately begin implementing the President's cryptocurrency recommendations
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The latest version of the National Defense Authorization Act of the U.S. House of Representatives incorporates a provision prohibiting central bank digital currency (CBDC)
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US Department of Justice officials state after the Tornado Cash case: Simply writing non-malicious code is not a crime
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Pham, the acting chairman of the US Commodity Futures Trading Commission (CFTC), announced the launch of a new round of crypto sprint plan to implement the Trump administration's digital asset strategy
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The U.S. Department of Justice announced that it would no longer prosecute decentralized software developers under Section 1960(b)(1)(C)
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Wyoming issues FRNT, the first state-level stablecoin in the United States
Asia
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South Korea's four major banks are accelerating preparations for the issuance of stable coins and plan to meet with Circle
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South Korea requires exchanges to suspend cryptocurrency lending services until new guidelines are formulated
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Japanese stablecoin issuer JPYC obtains license, or to launch yen stablecoin in October
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The Central Board of Direct Taxes in India has initiated a dialogue with domestic cryptocurrency exchanges and requested responses on issues related to digital assets
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Reuters reported that China is considering allowing the use of stablecoins backed by the Chinese yuan for the first time, in order to strengthen the internationalization process of the Chinese yuan
Other
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Haycen has been granted approval to issue a stablecoin in Bermuda, with plans to launch a GBP-pegged token
6. Industry Trends
The stablecoin ecosystem is expanding rapidly
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The four major banks in South Korea are accelerating their preparations for the issuance of stablecoins and plan to meet with Circle
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Japanese stablecoin issuer JPYC obtains license, may launch yen stablecoin in October
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Wyoming issues FRNT, the first state-level stablecoin in the United States
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Reuters reports that China is considering allowing the use of stablecoins backed by the Chinese yuan for the first time
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The minutes of the Federal Reserve meeting mentioned stablecoins 8 times, suggesting that they may have widespread impacts and merit close attention
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Paxos has been approved to issue PYUSD on the Stellar network
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Haycen has been approved to issue stablecoins in Bermuda, with plans to launch a GBP-pegged token
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MetaMask launches its native stablecoin, mUSD
The crypto ETF market is active, and institutional deployment is accelerating
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VanEck submits application documents for JitoSOL ETF
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21SHARES XRP ETF has been registered in Delaware
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Grayscale: Provides actively managed cryptocurrency income strategies for financial professionals through iCapital Marketplace
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Strategy has increased its holdings by 430 Bitcoin, with an average purchase cost of $119,666, resulting in a total position of over 629,000 Bitcoin
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Strategy: Relax stock sale rules to increase financing flexibility
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Dutch listed company AMDAX announced its plan to purchase 1% of the total Bitcoin supply
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"BNB version of micro-strategy" BNC expands BNB holdings to 325,000 tokens
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UBS Group: Chinese family offices plan to invest 5% of their funds in Bitcoin
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Huaxing Capital signed a memorandum of strategic cooperation with YZi Labs, committing to investing approximately US$100 million in the allocation of BNB assets
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ETHZilla has increased its share offering to raise $10 billion to support the purchase of ETH
Other
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US stock BTCS: will distribute a one-time blockchain dividend to shareholders in the form of ETH, with a maximum reward of up to $0.4 per share
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The ETH holdings of 69 Ethereum treasury companies have exceeded 4 million, and the market value of ETH holdings of the top three companies exceeds $10 billion
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Pump.fun's cumulative revenue has surpassed $800 million, primarily derived from 1% transaction fee
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Hyperliquid has become the company with the highest per capita revenue globally, generating an annual revenue of $102.4 million per employee
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Michael Saylor has once again released information regarding the Bitcoin Tracker
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WLFI tokens will be open for trading and the first 20% will be claimed on September 1st
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Kraken has announced the completion of its deployment of distributed validator technology, and will conduct Ethereum staking through the SSV network
7. Next week's outlook
AUG 2025 Crypto Calendar
August 25th: The unlocked circulation ratio of ALT is 6.01%, with a value of approximately $8.5 million; the Japan Crypto Summit WebX will be held in Tokyo from August 25th to 26th
August 26th: HUMA's unlocked circulation accounted for 23.38%, with a value of approximately $10 million
August 27: NVIDIA earnings report; Hong Kong Blockchain Summit
August 28: Revised annualized quarterly growth rate of real GDP for the second quarter in the United States; Bitcoin Asia will open at the Hong Kong Convention and Exhibition Center on August 28, with Eric Trump attending
August 29th: US Core PCE for July
8. Reference
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defillama.com
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coinmarketcap.com
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tradingview.com
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cryptoslam.io
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token.unlocks.app/
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dune.com
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itez.com/events
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cryptorank.io/
