Fed "Renovation Gate" Sparks Political Controversy, Crypto Market Follows Bitcoin Defense Line

Recently, the Fed has sparked a political storm due to the $3.1 billion headquarters renovation cost. Trump personally went to the Fed headquarters to pressure Chairman Powell, demanding an interest rate cut. Although Trump has temporarily shelved the idea of firing Powell, White House officials and Republicans have used this matter as a political weapon, accusing the Fed of "mismanagement" and "misleading Congress" in an attempt to undermine Powell's credibility to push for an interest rate cut.

However, the current financial environment in the United States has become extremely loose. The Chicago Fed's National Financial Conditions Index has fallen to a three-year low, the stock market continues to hit new highs, the size of money market funds has reached $7.1 trillion, and household savings remain high. The Fed is facing a dilemma: inflation is still above target and the labor market is strong, but the government is calling for significant interest rate cuts citing high national debt issuance pressure. Analysts are concerned that cutting interest rates at this time may exacerbate the stock market bubble.

In the crypto market, stablecoins remain the main narrative. A well-known analyst believes that the large-scale application of stablecoins will focus on B2B settlements, crypto assets and the DeFi ecosystem, as well as the expansion of sovereign finance. He pointed out that stablecoins combined with smart contracts can significantly reduce cross-border settlement costs. Within the crypto ecosystem, stablecoins have become the core liquidity infrastructure. In addition, stablecoins pegged to national currencies are expected to become an important tool in the evolution of geopolitical finance.

For Bitcoin, multiple analysts have pointed out short-term correction risks. The key range is in the mid-113,000 USD. Technical indicators show bearish divergence, and there is a gap in the range of 114,380-115,635 USD. Bitcoin faces strong resistance at 120,000 USD, with nearly 300 million USD net outflow from spot ETFs over the past three days. If it breaks through 123,218 USD, it may move towards a higher target; if it falls below 110,530 USD, bears may take the lead. The medium to long-term target price is 200,000 USD.

In contrast, Ethereum has shown relatively strong performance. The model indicates solid support in the range of $2000-$3000, with key resistance above at $4500. The long-term target price is $10,000. However, some analysts warn that short-term volatility may occur, as soaring borrowing costs could trigger liquidation sell-offs. Historical data shows an average return of 8.19% in Q3 and 22.59% in Q4.

Market funds are flowing from Bitcoin to Ethereum and other tokens. In the NFT sector, a listed company acquired a rare CryptoPunk for $5.15 million. Industry insiders predict that CryptoPunks may outperform Ethereum in this cycle. In addition, after the founder of a social platform announced the launch of an AI version of the product, the eponymous token surged over 100% in a short period.

Market Data Overview

As of July 25, 12:00 HKT:

• Bitcoin price is $115,774, with a year-to-date increase of 23.39%
• Ethereum price is $3,638.16, up 8.78% year-to-date.
• The market fear and greed index is 71, indicating a state of greed.
• Bitcoin accounts for 60.8% of the market, Ethereum accounts for 11.6%
• Approximately 200,000 people globally were liquidated within 24 hours, with a total amount exceeding 700 million dollars.

ETF fund flows:

• Bitcoin ETF daily net inflow of $227 million
• Ethereum ETF has seen a net inflow for 15 consecutive days, with a single-day inflow of 231 million dollars.

Today's Industry Trends

• A certain exchange will delist multiple perpetual contracts.
• A certain trading platform will launch a new token.
• Multiple projects will unlock tokens in the next two days.
• A certain foundation and a capital company plan to raise 400 million USD for the project's treasury.
• A certain company increased its holdings of Bitcoin and Ethereum.
• The new compliant stablecoin USDtb has been launched.
• A certain project launched a reserve fund to buy back tokens.
• The next round of payments by FTX will be executed at the end of September, involving $1.9 billion in disputed claims.