Markets begin the new week at an important crossroads as Bitcoin slips below one of its most significant long-term technical levels, while equities continue pushing higher on the back of strong earnings expectations. At the same time, rising Treasury yields, persistent inflation concerns, and renewed speculation around the Federal Reserve's next move are tightening financial conditions and creating an increasingly unusual divergence between crypto and traditional markets.

This report breaks down the key forces shaping markets this week: why Bitcoin's technical breakdown warrants caution despite improving institutional flows, how inflation and higher bond yields are challenging risk assets, and the critical economic data and technical levels that could determine where markets head next.

Let’s dive in 👇

Bitcoin just broke below its 200-week moving average, a line that has marked the bottom of every major crypto bear market since 2015. The token is down 44% from October's high, and $2.4 billion has fled Bitcoin ETFs in just nine days. Until price climbs back above that average, the technical damage argues for caution.

That crypto stress ties directly into what's happening in bonds. Two-year Treasury yields just hit their highest level since February 2025, near 4.2%, as markets bet the Fed's next move could be a hike rather than a cut, with oil near $100 keeping inflation hot. Higher short-term yields tighten conditions across markets, and that's a headwind for risk assets broadly, crypto included.

Stocks are shrugging it off, at least for now. Analysts expect S&P 500 earnings to grow roughly 23-24% this quarter, one of the strongest paces in years, powered largely by AI spending from mega-cap tech. That growth is the main reason stocks can justify record highs even as rates rise.

Price action backs that confidence up: the S&P 500 has posted back-to-back weekly gains heading into earnings season, including its best week in a year. Big banks, JPMorgan, Goldman Sachs, Bank of America, Wells Fargo, Citigroup, kick things off this week, and expectations are now high enough that "good" may not be good enough.

Put simply, crypto is signaling stress while stocks are betting on strength, and both bets can't be right forever. This week's bank earnings and Fed commentary will be the first real test of which market has it correct.

Sentiment continued to improve gradually this week, with the Fear & Greed Index rising to 27. Although the market remains in fear territory, the steady recovery in sentiment suggests investors are becoming slightly more optimistic.

Bitcoin ETF flows recorded a net inflow of approximately $90M on Friday. While the pace of inflows was more moderate than the previous week, total assets under management increased to around $78B, indicating that institutional exposure has continued to recover alongside improving market conditions.

Despite these encouraging developments, overall sentiment remains cautious, with the market still positioned firmly in fear territory. Continued ETF inflows and further improvements in investor confidence will likely be necessary to reinforce the current recovery and provide stronger support for a sustained bullish trend.

The week ahead features several key economic releases that could influence inflation expectations and the Federal Reserve's policy outlook. Markets will first focus on the June CPI report on Tuesday, followed by June PPI data on Wednesday, both of which will provide important insight into inflation trends.

Thursday brings June Retail Sales and the July Philadelphia Fed Manufacturing Index, offering fresh signals on consumer spending and business activity. The week concludes with the University of Michigan's July Consumer Sentiment and Inflation Expectations reports on Friday, which will provide additional context on consumer confidence and inflation outlook.

Together, these releases will be closely watched for their potential impact on interest rate expectations and broader market sentiment across equities, bonds, and crypto.

Bitcoin continues to consolidate within its established range and is currently trading around $62,900, with $60,700 acting as key support and $65,500 remaining the primary resistance level. Price has yet to break decisively in either direction, leaving the near-term technical outlook largely unchanged.

The two-week liquidation heatmap continues to show liquidity concentrated primarily below the current price, with leveraged liquidation clusters extending from $61,000 down to the $57,000 region. On the upside, the largest liquidity pocket sits just above the recent highs around $64,700, making both directions attractive from a liquidity perspective while maintaining a slight downside bias in the short term.

Bullish Scenario: Bitcoin needs to hold the $60,700 support level, offering long opportunities targeting the $65,500 resistance. Should price reclaim and successfully retest $65,500, additional long setups may emerge, targeting a move toward $72,000.

Bearish Scenario: Bitcoin needs to face rejection at $65,500, with short opportunities becoming valid on a confirmed bearish retest of that level, targeting $60,700. A decisive break below support would then expose the $58,300 region as the next downside target, with both bearish scenarios invalidated by a reclaim above the respective resistance levels.

Looking at the bigger picture, TOTAL3 continues to trade sideways alongside Bitcoin and is currently sitting around $671B. The key technical levels remain unchanged, with $695B acting as the next upside target, while $645B serves as the primary support in the event of a breakdown.

ETH/BTC has also remained range-bound, trading around 0.028 after holding support at 0.026. While the pair continues to trade above its key support level, it has so far been unable to generate enough momentum to reclaim the next major resistance at 0.029.

Taken together, the current market structure suggests that broader altcoin momentum remains limited despite ETH/BTC maintaining relative strength. Until a decisive breakout occurs in either TOTAL3 or ETH/BTC, we continue to favor maintaining a larger cash position, with exposure focused primarily on BTC and, selectively, a few top-10 altcoins.

We hope this report provided you with valuable insights into the latest market developments and geopolitical shifts.

As always, stay informed, stay prepared, and have a fantastic week ahead! 🚀

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