The macro landscape continues to evolve in a way that favors risk assets. The US dollar has resumed its broader downtrend, yields are steadily drifting lower, and equity markets are showing sensitivity to weak economic data.

At the same time, the crypto market remains in a tight range. With BTC dominance slipping and ETH/BTC still showing strength, the next altcoin rotation may be closer than many expect, but confirmation is still needed.

Here’s what we’ll cover today:

Let’s dive in.

The Bloomberg Dollar Spot Index has resumed its decline following a temporary recovery in July, breaking below the 1210 level and confirming the continuation of its broader downtrend. The index's inability to sustain momentum above 1220 during July's bounce suggests underlying fundamental pressures remain intact. The technical breakdown reinforces our view that dollar strength remains limited and rallies should be considered corrective within the larger bearish trend.

The S&P 500 has experienced a notable decline following weak US services sector data, pulling back from levels above 6400 reached in recent sessions. This correction represents the market's response to economic data that fell short of expectations, particularly concerning given the services sector's significant contribution to US GDP. The selloff highlights ongoing sensitivity to economic indicators and suggests investors remain cautious about growth prospects despite the index's strong performance over the past year.

The steady decline in yields from their 2023 peaks above 4.5% to current levels around 3.5-4.0% reflects growing market conviction that the Federal Reserve's tightening cycle has run its course. This normalized yield environment is particularly supportive for risk assets like Bitcoin, as it reduces the opportunity cost of holding non-yielding alternative investments.

The consistent downward trend in auction results suggests institutional investors are increasingly positioning for a lower-rate environment that favors growth assets and stores of value outside traditional fiat systems.

After facing rejection at the key level of $115,345, Bitcoin traded lower on Tuesday, even falling below the next support level at $113,363. Early this morning, price swiftly reclaimed that level and is now trending higher again, moving between the two key levels twice, giving us a clear range for price action to develop.

TOTAL3 has reclaimed the $950B key level after losing it last week and is now looking to retest it. At the start of the week, TOTAL3 pulled back, moving closer to that level and is now rising again. Keep in mind, we have not yet seen a complete retest, this may still be unfolding.

OTHERS was unable to reclaim the important $300B level, and after two failed breakout attempts, this metric has been trending lower as well. OTHERS found support at the $260B level and may now be moving higher. Note that none of our three metrics have yet confirmed a trend break on the hourly timeframe, still showing lower lows and lower highs.