HTX DeepThink: With improving inflation and rising expectations for interest rate cuts, why is the crypto market still under pressure?

In early June, the crypto market faced a delicate situation of both favorable policies and tight funding. Despite core inflation continuing to cool and expectations for interest rate cuts rising, high Beta assets still faced pressure in the short term. In this issue, HTX Research Chloe (@ChloeTalk1) focuses on macro liquidity and changes in market structure, analyzing the supporting factors behind Bitcoin's resilience and the potential systemic risks of altcoins.

Geopolitical Risks Heat Up: Gold and Oil Rise Together

Last week, Trump announced an increase in the import tariffs on steel and aluminum from 25% to 50%, with plans to further extend tariffs to key mineral resources. The EU responded strongly, stating it would take reciprocal measures. Meanwhile, Ukraine launched a large-scale drone attack on Russian air force bases, escalating the Russia-Ukraine conflict and increasing geopolitical risks. Against this backdrop, market risk aversion significantly rose, leading to an increase in gold prices, while oil prices also rose due to supply concerns and geopolitical tensions, despite OPEC+ announcing an increase in production by 411,000 barrels per day starting in July.

Core Inflation Cools, Fed's Dovish Space Expands

April PCE data showed stable performance, with core PCE year-on-year falling to 2.5%, the lowest since 2021, indicating that inflation is gradually approaching the Fed's long-term target. Additionally, the month-on-month real personal consumption expenditure in the U.S. fell from 0.7% to 0.1%, showing clear signs of cooling domestic demand, in line with the "soft landing" expectation. Fed Governor Waller pointed out that even though tariff policies may bring short-term inflationary pressure, there is still a possibility of interest rate cuts within the year. The current mainstream market expectation is that September will be the time window for the first rate cut in this cycle.

Bond Market Issues a Warning: Yields Rise to Critical Highs

Despite dovish inflation data, U.S. Treasury yields rose against the trend, with the 30-year yield reaching 5%, close to the 2023 high, and the 10-year yield approaching 4.6%. Contributing factors include concerns over fiscal deficits triggered by tax reduction bills pushed by Congress, as well as selling pressure from overseas bond markets (especially Japanese government bonds) affecting the U.S. market. The strong capital absorption effect of the bond market suppresses risk assets, limiting the performance space of high Beta assets like Bitcoin.

Mainstream Holds Steady, Altcoins Avoid

For Bitcoin, it is currently in a delicate phase of "policy-friendly, funding tight." On one hand, there are continuous favorable policies: the smooth advancement of stablecoin regulation, Token legislation, and tax exemptions, along with institutional buying of BTC providing long-term support; on the other hand, high yields on U.S. Treasuries and the replenishment of the TGA account are putting pressure on liquidity, making it difficult for BTC to break through strongly in the short term, with a higher probability of maintaining a range-bound movement.

On-chain data shows that about 89% of short-term Bitcoin holders are still in profit, nearing historical high levels, indicating that potential profit-taking pressure is accumulating; while about 70% of long-term holders are still profitable, showing a relatively robust structure. Meanwhile, the MVRV Z-Score has risen to around +1.6, indicating that market sentiment is optimistic but not yet overheated. In the derivatives market, open interest remains high at over $23 billion, with leveraged funds continuing to flow in, and the funding rate remaining positive, while the options skew indicator also reflects the market's willingness to hedge against downside risks. Overall, while BTC has not deviated from a mid-term bullish structure, the short-term accumulation of funds and high leverage will increase volatility, and future trends will need to wait for clearer macro signals. As for altcoins, due to high volatility and lack of structural support, their systemic correction risks may be stronger than mainstream coins.

Note: The content of this article does not constitute investment advice and does not represent any offer, solicitation, or recommendation for investment products.

About HTX DeepThink

HTX DeepThink is a crypto market insight column created by Huobi HTX, focusing on global macro trends, core economic data, and hot topics in the crypto industry, injecting new thinking power into the market, helping readers "find order in chaos" in the ever-changing crypto world.

About HTX Research

HTX Research is the exclusive research department under HTX Group, responsible for in-depth analysis of a wide range of fields including cryptocurrencies, blockchain technology, and emerging market trends, writing comprehensive reports, and providing professional assessments. HTX Research is committed to providing data-driven insights and strategic foresight, playing a key role in shaping industry perspectives and supporting informed decision-making in the digital asset space. With rigorous research methods and cutting-edge data analysis, HTX Research consistently stands at the forefront of innovation, leading the development of industry thought and promoting a deeper understanding of the ever-changing market dynamics.