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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: Last week, cryptoassets demonstrated notable relative resilience against traditional risk assets as the unwind in AI-related equities gathered pace and the Philadelphia Semiconductor Index (SOX) officially entered a bear market; against this backdrop, Bitcoin traded broadly sideways while relative strength returned to tokenization-related names such as Ethereum.
- Cryptoasset Sentiment Index: Our in-house Cryptoasset Sentiment Index has increased compared to last week and is now signalling a slightly bullish crypto market sentiment.
- Chart of the Week: Ethereum has been building relative momentum against Bitcoin since June amid increasing traction within the tokenization and stablecoin space - Ethereum is a clear relative beneficiary of this mega trend, as the majority of tokenized Real World Assets (RWAs) is being built on Ethereum.
Chart of the Week
Performance
Last week, cryptoassets demonstrated notable relative resilience against traditional risk assets as the unwind in AI-related equities gathered pace. US equities posted broad weekly losses, with the S&P 500 down around -1.6% and the Nasdaq shedding approximately -2.9%, led lower by a pronounced sell-off in semiconductor names. In fact, the Philadelphia Semiconductor Index (SOX) has now officially entered a bear market, with a correction of -23.6% from its highs - a development that mirrors the weakness in other closely related markets such as the KOSPI, which we have already highlighted in previous editions of this report.
Meanwhile, safe-haven bonds caught a bid as US Treasury yields eased on the back of softer June inflation prints, while commodities painted a mixed picture: crude oil continued to surge amid the escalating conflict in the Middle East, whereas gold corrected below the 4,000 USD mark.
Against this backdrop, Bitcoin traded broadly sideways around 64k USD and Ethereum consolidated - a comparatively benign performance given the magnitude of the drawdown in the AI complex.
That being said, we continue to see pronounced weakness among the major hyperscalers, most notably Oracle (ORCL), where 5-year CDS spreads remain at their highest level since the Global Financial Crisis in 2008. At the same time, 1-year implied volatilities across the hyperscaler space continue to make new highs - yet another signal that credit risks are on the rise, as outlined in our most recent Bitwise monthly Bitcoin Macro Investor report.
In contrast, relative strength has been returning to crypto markets - in particular to those names that stand to benefit from the mega trend of tokenization. Ethereum is a case in point: it has been building relative strength against Bitcoin essentially since June (Chart-of-the-Week), and this outperformance is consistent with the observed relative strength of companies building new financial rails on blockchain technology in traditional financial markets (e.g. the Mirae Asset Stablecoins and Tokenisation Index) vis-à-vis the overall large-cap crypto market (e.g. the Bitwise Large Cap 10 Index).
In fact, Ethereum has been building relative momentum against Bitcoin - and this despite stalling odds for the passage of the Clarity Act, with the latest Polymarket odds having fallen to just 38% as of this morning.
The fundamental picture supports this development. Major crypto applications are successfully generating real revenues - Hyperliquid alone has earned 912 mn USD over the past 12 months, as shown in our latest Bitwise quarterly Crypto Market Review. Stablecoin transactions declined somewhat in Q2 2026 after reaching a new all-time high in Q1 2026, but they already significantly exceed Visa transaction volumes, as also demonstrated in our most recent quarterly Crypto Market Review. Moreover, the value of tokenized Real World Assets (RWAs) has reached a new all-time high this year despite the ongoing bear market in crypto markets, and open interest in prediction markets has also climbed to a fresh record. In other words, the fundamentals of on-chain finance have continued to improve.
We therefore think it is quite likely that both multi-asset discretionary and momentum investors could rotate into this mega trend of tokenization, now that both precious metals and the AI trade (i.e. semiconductors and related markets) have taken a breather. Ethereum would be a clear relative beneficiary in this context, as it remains the dominant chain in terms of both RWA and stablecoin Total Value Locked (TVL).
In general, among the top 10 crypto assets Ethereum, ZCash, and LEO were the relative outperformers. Ethereum also outperformed bitcoin last week.
Sentiment
Our in-house “Cryptoasset Sentiment Index” increased significantly from negative to positive sentiment.
At the moment, 10 out of 15 indicators remain above their short-term trend.
BTC Exchange Inflows, Crypto ETP Fund Flows, BTC STH-SOPR, BTC 1m 25-delta skew and BTC Long Futures Liquidation Dominance all flipped from negative to positive, denoting a pick-up in speculation and risk appetite. That said, investor behaviour also points to a greater willingness to sell into strength, with rising exchange inflows and elevated spent output suggesting profit-taking. Combined with long liquidation dominance, this topside pressure likely weighed on Bitcoin's relative performance.
The Crypto Fear & Greed Index increased slightly to 29/100, the highest since the beginning of June, although it remains firmly in 'extreme fear' territory.
Performance dispersion declined slightly last week, all major crypto subsectors returned negative performances within a range of –0.46% to (L1’s) –5.94% (Meme’s).
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 slightly to 45% of our tracked altcoins in the index. Ethereum outperformed bitcoin last week. This is not inconsistent with a reduction in performance dispersion; it simply highlights breadth underperforming whilst blue chips outperform.
Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) decreased from 0.67 to 0.62 over the past week, signalling a slight contraction in risk appetite. Hence the subdued net global ETP flows.
CME Bitcoin Commercials Net Positioning shows that the difference between long and short CME Bitcoin futures contracts. The reading has declined slightly to −14.77% of open interest, suggesting investors have unwound some short leverage but remain largely hedged, or positioned outright for downside exposure. A further and sustained reduction would be a notable signal for both bullish momentum and upside volatility.
All in all, our Cryptoasset Sentiment Index swung from negative into positive territory, with 10 of 15 indicators above their short-term trend, and Crypto Fear & Greed increasing, though the latter remains in 'extreme fear' at 29/100. Beneath the surface the picture was softer. Every major subsector fell as dispersion narrowed, whilst CARA eased to 0.62, accompanied by subdued net ETP flows. Overall risk-on sentiment seems tepid and loose-footed.
Fund Flows
Global crypto ETPs experienced around +100.5 mn USD in net inflows last week, across all types of cryptoassets, after +299.7 mn USD in net inflows the previous week.
Global Bitcoin ETPs experienced net inflows of +21 mn USD last week, of which +68.3 mn USD in net inflows were related to US spot Bitcoin ETFs.
The Bitwise Bitcoin ETF (BITB) in the US experienced net inflows of +18.5 mn USD last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced net outflows equivalent to -0.3 mn USD, as the Bitwise Core Bitcoin ETP (BTC1) experienced net outflows of around -1.2 mn USD.
The Grayscale Bitcoin Trust (GBTC) posted net outflows of -53.1 mn USD whereas, the iShares Bitcoin Trust (IBIT) experienced net inflows of around +204.2 mn USD last week.
Meanwhile, global Ethereum ETPs experienced +79.1 mn USD in net inflows last week, of which US spot Ethereum ETFs recorded net inflows of around +101.5 mn USD on aggregate.
The Grayscale Ethereum Trust (ETHE) posted net outflows of -4.8 mn USD, whilst the iShares Ethereum Trust (ETHA) saw net inflows of +135.3 mn USD.
The Bitwise Ethereum ETF (ETHW) in the US experienced net inflows of +2.3 mn USD last week.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) recorded net inflows of +0.1 mn USD, whilst the Bitwise Ethereum Staking ETP (ET32) saw net outflows of -1 mn USD.
Altcoin ETPs ex Ethereum also saw net outflows of -0.9 mn USD last week.
Thematic & basket crypto ETPs posted net inflows of +1.3 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) recorded no net inflows or outflows last week.
All in all, inflows moderated considerably last week, pointing to a more selective risk appetite amongst investors. Ethereum-centric positioning was the clear driver, a continuation of previous week’s narrative, as altcoin and thematic products remained broadly flat.
On-Chain Data
Bitcoin continues to consolidate between $61k and $65k, trading within a relatively tight range over the week. From a daily technical perspective, price remains in a lower-high, lower-low structure. A sustained breakout above the $66k to $67k region would establish a higher high and suggest an improvement in local market structure.
A similar pattern remains visible on the weekly timeframe, although the corresponding breakout level sits closer to $82k. This suggests that a sustained move above $66k would be constructive for near-term structure, while a decisive break above $82k would provide stronger evidence of a return to risk-on conditions.
When assessing Bitcoin through the lens of price relative to the 200-day moving average, a clear cross-asset divergence remains. Major equity indices continue to trade at elevated historical percentiles, while Bitcoin has undergone a significant reset. Gold and silver appear even more compressed, ranking in the 3.6th and 2.8th percentiles, respectively.
This suggests that capital remains concentrated in headline equity indices, while digital assets, using Bitcoin as a proxy, and precious metals continue to attract comparatively limited investor attention.
Similarly to last week, volumes across major market sectors remain significantly subdued. Seven-day spot and futures volumes both rank in the 0.5th percentile over the past year. On-chain volume has recorded the strongest relative reading at the 15.3rd percentile, although this remains muted on balance.
Rallies tend to display stronger underlying structure when supported by rising volume. At present, the advance lacks broad investor participation, with speculative activity remaining contained.
| Market | 7-Day Volume | 1-Year Percentile |
|---|---|---|
| Spot | $27.0bn | 0.5% |
| Futures | $227.4bn | 0.5% |
| Options | $22.5bn | 11.7% |
| On-chain | $27.8bn | 15.3% |
| ETF | $9.4bn | 8.5% |
| DAT | $6.7bn | 0.5% |
Investor loss-taking continues to improve but has not yet shifted into a profit-taking regime. The Spent Output Profit Ratio (SOPR), which tracks the average profit or loss multiple realised across coins spent each day, has continued to recover and is now oscillating around breakeven.
A similar structure is visible among Short-Term Holders, defined as investors who acquired their coins within the past 155 days, with the average coin also being spent near breakeven. This suggests that investors are using the rally to de-risk and exit around their cost basis. Historically, a sustained shift into profit-taking would represent a more constructive development, while persistent loss-taking and breakeven exits remain more characteristic of risk-off conditions.
The supply held by Long-Term Holders, defined as investors who have held their coins for more than 155 days, remains close to its all-time high at 14.95mn BTC. However, growth in the cohort has been broadly flat since May, suggesting that coins maturing into Long-Term Holder status are being largely offset by spending from existing holders. The 155-day threshold now captures coins acquired around the February capitulation.
This is notable given the elevated sell-side pressure, particularly loss-taking, originating from coins aged between one and two years. It suggests that mature investors who accumulated around the market top are capitulating, while value-oriented buyers continue to age into the cohort and absorb much of this distribution. On balance, HODLing remains the dominant cohort dynamic, with Long-Term Holder supply still near record levels and the available supply gradually tightening.
On the downside, the Realised Price at $52.9k, representing the market’s average cost basis, and the 200-week moving average at $63k have historically bracketed the regions where terminal cycle lows form during deep bear markets. Our base case remains that terminal valuation forms within this range. Notably, price appears to be finding a degree of support around the 200-week moving average, which would represent a constructive development if sustained.
To the upside, the Short-Term Holder cost basis at $69.3k, representing the average acquisition price of newer investors, and the True Market Mean at $76.3k, representing the average acquisition price of active investors, mark important local and macro equilibrium levels. A decisive reclaim of these thresholds has historically been associated with renewed momentum and a return to risk-on conditions.
Futures, Options & Perpetuals
Over the past week, BTC perpetual futures open interest decreased by approximately -3.9k BTC, while CME futures open interest was broadly flat versus the prior week. That combination suggests some positioning was reduced across offshore perpetual markets, while exposure on more institutionally oriented venues remained stable. Aggregate futures liquidations increased from the prior week. In total, liquidations reached roughly $1.90bn over the week, versus $1.70bn previously, with long liquidations of $1.10bn and short liquidations of $0.80bn.
The week’s positioning reflected a market that remained sensitive to geopolitical risk but continued to hold up relatively well. Escalation in the conflict between the United States and Iran, including reported disruption around the Strait of Hormuz and threats to target energy infrastructure, raised concerns that the conflict could become prolonged and lead to wider regional disruption. Despite this, Bitcoin remained above its 200-week moving average and closed slightly positive for the week. Liquidity is now forming around $61k on the downside and $65k to $66k on the upside.
Perpetual funding rates, measured on a 7-day moving average, ended the week lower at around +6.65% annualised, down from +8.00% last week. That suggests futures positioning became less aggressive as geopolitical uncertainty remained elevated. In other words, some leverage was reduced and traders became more cautious, even as Bitcoin held above a key long-term technical level and finished the week slightly higher.
At the same time, the BTC 3-month annualised basis ticked up to around +3.8%, from +3.4% last week. That leaves the futures curve slightly more positive, suggesting demand for term futures improved modestly even as short-term perpetual positioning became more cautious. The divergence between lower funding and a higher basis may indicate that investors remained willing to hold medium-term exposure but were less willing to add leverage through perpetual markets.
In options markets, BTC Deribit options open interest increased by roughly 49.3k BTC, bringing total open interest to around 478.3k BTC. The Deribit put-to-call open interest ratio decreased slightly to 0.46, while the equivalent metric across IBIT options also moved lower to 0.70 by week’s end.
Taken together, these moves suggest options activity increased while positioning became less defensive across both crypto-native and ETF-linked markets. The decline in the Deribit put-to-call ratio points to lower relative demand for downside protection among crypto-native participants, while the lower IBIT ratio suggests ETF-linked options investors also became less cautious as Bitcoin held firm despite the fragile geopolitical backdrop.
The 25-delta skew moved lower across all tenors. This suggests downside protection became cheaper relative to upside exposure, likely reflecting reduced demand for puts as Bitcoin remained resilient through the geopolitical headlines. It may also point to increased demand for upside calls, with the move across the curve suggesting investors became less defensive beyond just the very short term.
Total GEX, on a 7-day moving average basis, decreased from around -$1.30bn to -$3.19bn. This suggests dealer positioning became significantly more negative, increasing the market’s sensitivity to hedging flows if Bitcoin begins to move sharply. In practical terms, negative gamma can amplify price moves in either direction, particularly if spot breaks outside the current liquidity range.
Dealer gamma exposure remains concentrated around important levels above the current spot range, with the bulk of negative gamma clustered around the $71k to $72k strikes. Positive gamma is concentrated around the $70k area. As these levels remain meaningfully above spot, they are unlikely to have a major near-term impact unless Bitcoin stages a stronger recovery. However, a move towards this area could lead to more volatile price action as dealer hedging flows interact with the large negative gamma positions.
In short, Bitcoin held up relatively well despite escalating tensions between the United States and Iran and continued concern around the Strait of Hormuz. Liquidations increased to $1.90bn and were weighted towards longs, while perpetual open interest declined and CME open interest remained flat. Funding moved lower, but the 3-month basis strengthened slightly, suggesting short-term leverage became more cautious while medium-term futures demand improved. Options open interest increased, put-to-call ratios moved lower and skew declined across all tenors as downside hedging demand eased. With total dealer gamma becoming more negative and liquidity concentrated around $61k to $66k, prices remain sensitive to any break outside the current range.
Bottom Line
- Performance: Last week, cryptoassets demonstrated notable relative resilience against traditional risk assets as the unwind in AI-related equities gathered pace and the Philadelphia Semiconductor Index (SOX) officially entered a bear market; against this backdrop, Bitcoin traded broadly sideways while relative strength returned to tokenization-related names such as Ethereum.
- Cryptoasset Sentiment Index: Our in-house Cryptoasset Sentiment Index has increased compared to last week and is now signalling a slightly bullish crypto market sentiment.
- Chart of the Week: Ethereum has been building relative momentum against Bitcoin since June amid increasing traction within the tokenization and stablecoin space - Ethereum is a clear relative beneficiary of this mega trend, as the majority of tokenized Real World Assets (RWAs) is being built on Ethereum.
Appendix
Data subject to change
Combined positioning = futures and options in % of Ol
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Important Analytical Limitations: The observations and analyses presented in this document are based on historical market patterns and data correlations which may not repeat or continue in future market conditions. Past correlations between capital flows and performance metrics are not indicative of future performance and should not be extrapolated as predictive indicators. Material downside risks remain present across all investment timeframes regardless of current undervaluation metrics or favorable technical indicators. All model outputs, fair value calculations, and quantitative assessments are subject to significant uncertainty and methodological limitations, and should not be relied upon as the sole basis for making investment decisions. Investors should conduct independent due diligence and consider multiple factors beyond the scope of this analysis.
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