This report is for professional investors and information purposes only. Persons without professional investment experience should not rely on it. Not investment advice or a personal recommendation. Cryptoassets are high risk and volatile and you may lose all capital invested. See full risk information at the end of this document.
- Performance: Cryptoassets rebounded strongly last week, with altcoins outperforming Bitcoin in line with their elevated beta, as a weak US payrolls report and the first dovish signal from Fed Chair Warsh unwound July hike odds and eased financial conditions, a shift reflected in the US Dollar's retreat from its one-year high. Even so, the disorderly rotation within the "AI trade", with semiconductor and compute-leasing names correcting sharply, underscores that market-driven tightening remains the key downside risk.
- Cryptoasset Sentiment Index: Our in-house Cryptoasset Sentiment Index flipped from negative to positive, likely supported by an improvement in Cross Asset Risk Appetite and the Greed and Fear Index. Together, this is likely the basis of the altcoin outperformance.
- Chart-of-the-Week: Cross-asset Mayer Multiple, calculated as spot price divided by the 200-day moving average, highlights a clear divergence in market positioning. US equities remain firmly above their 200-day averages, with readings between the 66th and 83rd historical percentiles. In contrast, Bitcoin remains historically depressed on this measure, ranking in the 22nd percentile. Silver and gold appear even more compressed, placing in only the 9th and 5th percentiles, respectively.
Chart of the Week
Performance
Cryptoassets recorded a week of strong performance, with a notable rebound across the board. Altcoins generally outperformed Bitcoin, consistent with the extremely elevated beta between Bitcoin and the altcoin sector.
Despite the strong week amongst digital assets, the key concern we keep reiterating remains a disorderly unwind of the "AI trade". Pressure rotated within the AI complex last week. While the hyperscalers themselves rallied, semiconductor, memory, equipment and compute-leasing names corrected sharply after Meta's plan to lease surplus data centre capacity punctured the assumption of perpetual compute scarcity. The Philadelphia Semiconductor Index fell over 6% on July 1, with the selloff spreading to Samsung, SK Hynix and the broader Asian complex the following session.
The underlying risks remain familiar. Restrictive monetary policy, elevated long-term yields, stretched valuations and an exceptional degree of concentration in US technology markets.
As highlighted in our chart-of-the-week, the Cross-asset Mayer Multiple, calculated as spot price divided by the 200-day moving average, highlights a clear divergence in market positioning. US equities remain firmly above their 200-day averages, with readings between the 66th and 83rd historical percentiles. In contrast, Bitcoin remains historically depressed on this measure, ranking in the 22nd percentile. Silver and gold appear even more compressed, placing in only the 9th and 5th percentiles, respectively.
On the macro side, the June US employment report was unambiguously soft, nonfarm payrolls rose just 57,000 against a consensus of 115,000, with the prior two months revised down by a combined 74,000. While the print signals a clear loss of momentum in the labour market, it is constructive for the rate outlook as cooling labour demand reduces the pressure on the Fed to tighten further, and the roughly 30% probability of a July hike priced ahead of the release was fully unwound. Attention now turns to the June CPI print on July 14.
This was compounded by the first genuinely dovish signal from the new Fed leadership. Chair Warsh told the ECB's Sintra forum that inflation risks had come down, his first notably softer comment since taking office. The disinflationary message was corroborated on the supply side, where the ISM manufacturing prices index fell 9.1 points to 73.0, its largest single-month decline since July 2022, though the reading still signals broadly rising input costs, with the war-driven petroleum and tariff effects yet to fully unwind.
We would caution, however, that financial tightening does not need to come from another Fed hike. It can be delivered endogenously by markets themselves. A correction in crowded US technology equities, precisely the scenario sketched above, would reduce wealth, raise corporate funding costs, widen credit spreads and constrain the debt-financed AI capex cycle. Bitcoin may therefore remain under pressure even if policy rates are stable, because the relevant transmission mechanism is broader financial conditions rather than the policy rate alone.
For now, though, the local easing in conditions saw the DXY post a negative week, retreating from its recent one-year high. The index remains a crude barometer for global liquidity. Bitcoin, which we have continually characterised as the “macro canary in the coal mine”, appears to have responded to these local improvements, providing a wave of relief across the digital asset complex following a challenging few weeks.
On the energy front, crude has retraced to pre-war levels, with Brent ending the week around $72 per barrel, its lowest since late February, and WTI at $69. Crude exports from Saudi Arabia have recovered to roughly 90% of their pre-war baseline as shipping through the Strait of Hormuz continues to normalise. According to ship-tracking company Kpler traffic has stabilized at 30 to 60 vessel crossings per day. While this is a massive increase from the total standstill observed during the peak of the war, it remains well below the pre-conflict average of over 130 daily.
Additionally, OPEC+ subsequently agreed to increase August production by around 188,000 barrels per day. Nevertheless, the recovery in maritime traffic remains incomplete, and renewed disruption could quickly reverse the recent relief in oil prices.
In general, among the top 10 crypto assets ZCash, Hyperliquid and Solana were the relative outperformers. Ethereum also outperformed bitcoin last week.
Sentiment
Our in-house “Cryptoasset Sentiment Index” transitioned from negative to positive over the course of the week, in line with improving cross asset risk appetite.
At the moment, 9 out of 15 indicators remain above their short-term trend.
BTC STH-SOPR, BTC Exchange Inflows and BTC 1M Implied Volatility have all turned positive, reversing the week prior’s negative readings. An increase in exchange inflows with spent output tends to suggest an investor base that is actively contributing to selling pressure. A pickup in Implied Volatility also suggests speculative appetite has rebounded slightly although it is still broadly compressed.
The Crypto Fear & Greed Index increased to 24/100 last week, although it remains firmly in 'extreme fear' territory. This increase has likely supported altcoin sentiment and flows.
Performance dispersion narrowed slightly last week. This is not inconsistent with ETP flow rotation, instead it suggests the rotation was concentrated in blue chips.
When dispersion decreases, it may indicate that the market appears to be driven by a less diverse set of narratives which, in our analysis, has historically been associated with periods of decreasing risk appetite in prior market cycles.
Altcoin outperformance vis-à-vis Bitcoin increased to 65% of our tracked altcoins in the index. Ethereum outperformed bitcoin last week.
Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) increased from 0.23 to 0.57 over the past week, signalling a considerable rise in risk appetite. This has likely supported on crypto sentiment and risk exposure.
CME Bitcoin Commercials Net Positioning shows that the difference between long and short CME Bitcoin futures contracts. The reading has flattened slightly −15.2% of open interest currently, which sits slightly below record lows of around −16.26%, suggesting investors have unwound a little short leverage but remain largely hedged, or positioned outright for downside exposure.
Together, blue-chip altcoin outperformance appears to be the main story of the past week, partly owing to Bitcoin remaining subdued amid continued pressure in the derivatives market and strong ETP net outflows. A broader improvement in cross-asset risk appetite, in line with our in-house Sentiment Index, reflected this altcoin rotation.
Fund Flows
Global crypto ETPs experienced around –719.5 mn USD in net outflows last week, across all types of crypto assets, after –1901.2 mn USD in net outflows the previous week.
Global Bitcoin ETPs continued to experience net outflows of –778.2 mn USD last week, of which –562.0 mn USD in net outflows were related to US spot Bitcoin ETFs.
The Bitwise Bitcoin ETF (BITB) in the US experienced no net inflows or outflows last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced net outflows equivalent to –2.0 mn USD, as the Bitwise Core Bitcoin ETP (BTC1) experienced net inflows of around +1.5 mn USD.
The Grayscale Bitcoin Trust (GBTC) posted net outflows of –27.7 mn USD whereas, the iShares Bitcoin Trust (IBIT) experienced net outflows of around –772.6 mn USD last week.
Meanwhile, global Ethereum ETPs experienced +39.3 mn USD in net inflows last week, of which US spot Ethereum ETFs recorded net inflows of around +25.6 mn USD on aggregate.
The Grayscale Ethereum Trust (ETHE) posted net outflows of –0.6 mn USD, whilst the iShares Ethereum Trust (ETHA) saw net inflows of +44.7 mn USD.
The Bitwise Ethereum ETF (ETHW) in the US experienced no net inflows or outflows last week.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) recorded net outflows of –0.2 mn USD, whilst the Bitwise Ethereum Staking ETP (ET32) saw net inflows of +0.3 mn USD.
Altcoin ETPs ex Ethereum also saw net inflows of +14.4 mn USD last week.
Thematic & basket crypto ETPs posted net inflows of +5.1 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) recorded no net inflows or outflows last week.
Overall, global ETP flows saw large net outflows, largely stemming from Bitcoin ETPs, specifically BlackRock's IBIT product. Although a slight altcoin rotation was evident, with positive net flows concentrated in Ethereum. This trend has persisted over recent weeks and may signal improving sentiment and fundamentals for blue-chip altcoins.
On-Chain Data
Across the week, Bitcoin recovered to around $63k from its cycle low of $58k. Large-cap assets, with market capitalisations above $1bn, recorded the largest absolute increase, adding $89.2bn. Mid-cap assets, valued between $100mn and $1bn, gained $2.5bn, while small-cap assets, defined as those with market capitalisations below $100mn, remained broadly unchanged.
In relative terms, large and mid caps rose by 4.3% and 5.4%, respectively, while small caps were largely flat.
The recent recovery, however, has not been supported by a substantial increase in Bitcoin trading volumes across major market sectors.
| Market | 7-Day Volume | 1-Year Percentile |
|---|---|---|
| Spot | $33.1bn | 1.4% |
| Futures | $234.5bn | 12.8% |
| Options | $24.1bn | 16.9% |
| On-chain | $33.8bn | 28.4% |
| ETF | $9.2bn | 3.8% |
| DAT | $14.0bn | 30.9% |
Notably, spot, futures, options and ETF volumes remain unusually subdued, while on-chain and DAT activity has been comparatively firmer. On balance, market participation remains historically weak, and a broader increase in activity would provide stronger confirmation of the recovery and an improvement in underlying market structure.
Aggregate investor stress improved across the week but remains elevated, with approximately $849bn of capital held at a loss, equivalent to around 80% of total invested value. This suggests that a substantial share of recent market participants remains underwater, maintaining significant pressure across investor portfolios.
Despite this elevated stress profile, realised losses have fallen sharply to $375mn, even as price reached a new cycle low. This suggests that a degree of seller exhaustion may be emerging, with successive waves of loss-taking becoming progressively shallower and investors displaying greater resilience around current price levels. It also indicates that the pool of marginal sellers available to capitulate with each move lower is gradually diminishing.
Historically, declining prices alongside subsiding realised losses have been associated with a positive divergence. However, such divergences can still fail, and the signal remains unconfirmed at present.
Across Coinbase and Binance, spot order book depth for USD and USDT-quoted pairs, respectively, remains constrained. Coinbase reports aggregate depth of $27.7mn, while Binance reports $55.5mn within 500bps of the mid-market price. Although both have recovered modestly from their post-crash lows, liquidity across leading centralised exchanges remains relatively tight.
Historically, periods of constrained liquidity have often proceeded heightened volatility and coincided with tactical market lows. However, this relationship is not deterministic and may not persist under future market conditions.
Investor accumulation remains elevated, as reflected by the Accumulation Trend Score, which normalises and scores balance changes across wallet cohorts on a scale from 0 to 1. A reading of 0 indicates distribution, while 1 signals strong accumulation. Since 6 June, the metric has remained consistently elevated between 0.75 and 1.0, indicating sustained accumulation across the market.
Strategy’s STRC preferred stock, designed to trade near its $100 stated amount through a variable dividend, has recovered to $88. The rebound followed Strategy’s Digital Credit Capital Framework, which raised the dividend to 12%, disclosed 17.4 months of reserve coverage, and authorised Bitcoin monetisation and up to $1bn of Digital Credit security repurchases, with STRC prioritised. Although STRC remains below par, constraining its efficiency as a capital-raising vehicle for Bitcoin accumulation, the sharp recovery suggests that concerns around Strategy’s capital management are receding and confidence in its products is beginning to return.
On the downside, the Realised Price at $53.1k, representing the market’s average cost basis, and the 200-week moving average at $62.6k have historically provided useful reference points for terminal cycle-low regions during deep bear markets. Our base case remains that terminal valuation forms somewhere within this range.
Of note, Bitcoin is currently attempting to reclaim the 200-week moving average, the previously identified upper bound of our bottoming zone. Subsequent price action around this level should provide further insight into the strength and durability of the recovery.
To the upside, the Short-Term Holder cost basis at $70.2k, representing the average acquisition price of newer investors, and the True Market Mean at $76.6k, representing the average acquisition price of active investors, mark important local and macro market equilibrium levels. A decisive reclaim of these thresholds has historically been associated with renewed market momentum and a potential return to risk-on conditions.
Futures, Options & Perpetuals
Over the past week, BTC perpetual futures open interest increased by approximately +15.6k BTC, while CME futures open interest fell by around -8k BTC versus the prior week. That combination suggests positioning rebuilt across offshore perpetual markets, while more institutionally oriented venues continued to reduce exposure, although the decline in CME open interest was relatively modest. Aggregate futures liquidations declined from the prior week. In total, liquidations reached roughly $2.10bn over the week, versus $3.50bn previously, with long liquidations of $1.00bn and short liquidations of $1.10bn.
The week’s positioning reflected a market that saw some signs of a relief rally after macro pressure eased. Kevin Warsh’s speech came out less hawkish than expected, while nonfarm payrolls data showed slower US hiring even as unemployment declined. That helped risk sentiment improve, with crypto outperforming in particular after reaching historically low RSI levels. BTC bounced from recent lows and is now trading just below its 200-week moving average. It remains to be seen whether Bitcoin can reclaim this level and convert it from resistance back into support. Liquidity is now forming around $60k to $61k on the downside and $64k to $65k on the upside, leaving the market in a tight range around this key long-term level.
Perpetual funding rates, measured on a 7-day moving average, ended the week higher at around +6.25% annualised, up from +3.66% last week. That suggests futures positioning became more constructive, with traders rebuilding long exposure as spot recovered. However, funding remains moderate in absolute terms and does not yet point to an overly stretched or aggressively levered long market.
At the same time, the BTC 3-month annualised basis ticked up to around +3.3%, from +2.3% last week. That leaves the futures curve modestly more positive, suggesting term futures demand improved alongside the broader relief rally. The move reinforces the view that investors became more willing to add exposure as macro fears eased, although the basis still remains moderate rather than stretched.
In options markets, BTC Deribit options open interest increased modestly by roughly +22.9k BTC, bringing total open interest up to 360.6k BTC. The Deribit put-to-call open interest ratio decreased to 0.56, while the equivalent metric across IBIT options also moved lower to 0.80 by week’s end.
Taken together, these moves suggest options exposure began to rebuild, while positioning became less defensive across both crypto-native and ETF-linked markets. The decline in the Deribit put-to-call ratio points to reduced relative downside hedging among crypto-native participants, while the lower IBIT ratio suggests ETF-linked options investors also became slightly less cautious as spot stabilised.
The 25-delta skew moved slightly lower across all tenors during the week. That suggests downside protection became less expensive as the relief rally reduced immediate hedging demand and traders became less concerned about a sharper break lower. The move was consistent with improving risk sentiment, lower realised stress, and the market’s attempt to stabilise near the 200-week moving average.
Total GEX, on a 7-day moving average basis, decreased from around -$199mn to -$809mn. This suggests dealer positioning became more negative again, increasing the market’s sensitivity to hedging flows around nearby strike levels. In practical terms, spot may become more mechanically reactive if price moves sharply through the current liquidity range.
Dealer gamma exposure also remains concentrated around important nearby levels, with the bulk of negative gamma clustered around the $62k to $63k strikes. That leaves the market most sensitive to a renewed move towards the middle of the current range and around the 200-week moving average. By contrast, positive gamma is concentrated around the $67k to $68k area, suggesting stabilising dealer flows sit meaningfully above spot and are unlikely to provide near-term support unless BTC stages a stronger recovery.
In short, Bitcoin saw a relief rally after Warsh’s less hawkish speech and softer US hiring data helped ease macro concerns. Liquidations fell to $2.10bn and were broadly balanced between longs and shorts, while perpetual open interest increased and CME open interest declined. Funding rose, basis strengthened, options exposure rebuilt, and skew moved lower as demand for downside protection eased. With dealer gamma more negative and liquidity concentrated around $60k to $65k, prices remain highly sensitive around the 200-week moving average.
Bottom Line
- Performance: Cryptoassets rebounded strongly last week, with altcoins outperforming Bitcoin in line with their elevated beta, as a weak US payrolls report and the first dovish signal from Fed Chair Warsh unwound July hike odds and eased financial conditions, a shift reflected in the US Dollar's retreat from its one-year high. Even so, the disorderly rotation within the "AI trade", with semiconductor and compute-leasing names correcting sharply, underscores that market-driven tightening remains the key downside risk.
- Cryptoasset Sentiment Index: Our in-house Cryptoasset Sentiment Index flipped from negative to positive, likely supported by an improvement in Cross Asset Risk Appetite and the Greed and Fear Index. Together, this is likely the basis of the altcoin outperformance.
- Chart-of-the-Week: Cross-asset Mayer Multiple, calculated as spot price divided by the 200-day moving average, highlights a clear divergence in market positioning. US equities remain firmly above their 200-day averages, with readings between the 66th and 83rd historical percentiles. In contrast, Bitcoin remains historically depressed on this measure, ranking in the 22nd percentile. Silver and gold appear even more compressed, placing in only the 9th and 5th percentiles, respectively.
Appendix
Data subject to change
Combined positioning = futures and options in % of Ol
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