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Crypto hedge funds are hoarding cash, equities are stuck in a tight range, and macro liquidity signals are quietly tightening. When institutional investors build dry powder like this, it rarely lasts long, either a sharp rally or another leg lower usually follows.

This week’s report breaks down the growing hesitation with 14 detailed charts covering crypto fund cash balances, the dollar rebound, equity range dynamics, and Japan’s bond market signal. The crypto section dissects Bitcoin, Ethereum, and Solana, delivering long and short trading setups with precise entry points, targets, and invalidation zones.

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The dollar is closing out its best week since October, with the Bloomberg Dollar Spot Index bouncing sharply off recent lows near 1,180. Stronger-than-expected US economic data, including a surge in industrial production and a surprise drop in jobless claims, reminded markets that the Fed has little reason to rush rate cuts. The stronger dollar continues tightening financial conditions globally, creating headwinds for commodities, emerging markets, and risk assets broadly.

That caution is clearly visible in US equities, where the S&P 500 has spent the last six weeks trapped between 6,800 and 7,000, unable to hold a breakout above the key psychological level. Sellers keep showing up near the top of the range, and buyers keep defending the bottom, a standoff that reflects genuine uncertainty about valuations and Fed policy. Until one side blinks, this sideways grind is the path of least resistance.

Crypto hedge funds are sending a similar message. Their average cash balances have climbed back to roughly 14–15%, well above the long-run average of 10%, meaning institutional players in digital assets are sitting on dry powder rather than deploying it. History suggests these elevated cash levels resolve one of two ways: either a catalyst arrives, funds deploy aggressively, and prices rally sharply, or the caution proves prescient and prices drift lower first. Either way, it signals the smart money isn't convinced this is the time to buy.

Meanwhile, Japan's bond market is sending a signal worth paying attention to. The spread between 5-year and 30-year Japanese government bond yields has collapsed to around 160 basis points, as the Bank of Japan presses ahead with rate normalization, a largely healthy development after decades of near-zero rates. The risk, however, lies in the side effects: rising short-term Japanese yields erode the profitability of the yen carry trade, and when that trade unwinds it can hit global equities and FX markets hard and fast, as investors got a sharp reminder in August 2024.

The big picture this week is one of coordinated hesitation. A dollar catching a bid, stocks unable to break higher, crypto funds hoarding cash, and Japan's bond market quietly tightening global liquidity. The common thread is a world still waiting for clarity on where rates are headed, and until that clarity arrives, the path for risk assets remains narrow.

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Bitcoin trended lower throughout the week, forming lower highs and lower lows until finding support at our technical level of $65,500 on Thursday, before bouncing back to $68,100. BTC remains rangebound between $65,500 and $72,000.