This week brought sharp moves across crypto and traditional markets as macroeconomic data weakened, speculation around Trump’s proposed $5 trillion stimulus bill heated up, and key technical levels were challenged across the board.

From ETF flows to liquidation clusters, markets remain highly reactive, and the setup for the weekend is anything but quiet.

Here's what you need to know heading into the weekend:

Let’s dive in!

U.S. economic data has softened meaningfully in recent weeks. The U.S. Economic Surprise Index has turned negative, indicating that macroeconomic releases are consistently underperforming expectations. At the same time, Treasury yields have declined, with the 10-year yield retreating from recent highs as growth and inflation expectations moderate.

This shift in data has reopened the door to potential monetary easing. While a rate cut is not yet fully priced in for September, weakening labor market indicators have increased the market-implied probability of a dovish pivot.

The Fed's September meeting now carries increased uncertainty. Following the June jobs report, futures markets fully priced in a cut, but those odds have since moderated. Recent Fedspeak remains cautious, with policymakers emphasizing a data-dependent and gradualist approach.

The evolution of this policy stance is crucial. Lower interest rates and improved liquidity conditions historically support asset prices, and cryptocurrencies, in particular, are highly sensitive to macro liquidity cycles. Should economic data continue to weaken, the balance may tip further toward policy easing in Q4.

Equity markets have responded positively to this backdrop. The S&P 500 has reached new all-time highs, supported by a combination of softer macro data and resilient corporate earnings. This mix is creating a favorable environment for growth assets and alternatives.

There is clear evidence of institutional rotation into risk assets, with growing positioning in equities, tech, and digital assets. Bitcoin, now more broadly accepted by institutional allocators and with ETF flows contributing to structural demand, continues to be very well-positioned to benefit from this trend.

Despite the slowdown in growth, Treasury yields remain elevated relative to the post-2008 average, and debt servicing costs are rising sharply. This dynamic further reinforces the pressure for both continued fiscal stimulus and eventual monetary accommodation.

Markets are closely watching Washington. President Trump is expected to sign the $5 trillion “One Big Beautiful Bill”, the largest debt ceiling increase in U.S. history. The legislation includes extended tax cuts and expanded spending, injecting significant liquidity into the system.

The COVID-era fiscal response offers a useful precedent: between March and December 2020, over $4.5 trillion in fiscal stimulus helped fuel a powerful asset reflation. Bitcoin surged from $3,800 to $29,000, while the S&P 500 gained over 68%.

Today’s environment bears some resemblance, but with more entrenched inflation risks, higher starting yields, and tighter monetary policy.

The convergence of monetary easing potential, rising fiscal stimulus, and mounting debt burdens presents a compelling case for capital rotation into scarce digital assets. The upcoming Treasury issuance calendar, combined with fiscal policy developments, will be critical catalysts for the next leg of crypto market performance.