Which data this week will determine the trend of the crypto market in the second half of the year?

Deng Tong, Golden Finance

This week will be "the most data-rich week of the year" in the United States. What are the major events worth paying attention to this week? What are the future trends of the crypto market?

I. Major Events Worth Watching This Week

1. Federal Reserve Interest Rate Meeting

On July 28th, local time, Trump stated that the Federal Reserve must cut interest rates. Trump said, "Even without a rate cut, the United States is doing very well, but with a rate cut, the United States will be even better." Federal Reserve Chairman Powell's term ends in May 2026. The Federal Reserve, led by Powell, is unwilling to lower the benchmark interest rate from the current target range of 4.25% to 4.50% to 1%, as Trump has requested, to reduce federal government borrowing costs. Trump was dissatisfied with this and repeatedly threatened to fire Powell. Trump's remarks came as the Federal Reserve held its July interest rate meeting on Tuesday (July 29th) and Wednesday (July 30th) local time. The Fed will announce its latest interest rate decision, and Powell will hold a monetary policy press conference. Nick Timiraos, a "Federal Reserve voice," wrote in an article: Fed officials expect they will eventually need to continue cutting interest rates, but they are not ready to do so on Wednesday. They disagree on what evidence they need to see first and whether waiting for clarity is a mistake. Officials are now split into three camps on whether to resume rate cuts. The focus will be on whether Powell will provide any hints of a September rate cut at his press conference and whether his colleagues will begin laying the groundwork for a rate cut at the next meeting in the coming days and weeks. A Huatai Securities research report stated: Although Trump has repeatedly pressured Powell to cut interest rates since the June meeting, and some Fed members have called for a July rate cut, given the overall outperformance of the job market and the gradual transmission of tariffs into inflation, the Fed is expected to remain on hold at its July meeting. Subsequent rate cut decisions will depend on economic data from July to August. A continued weakening of the job market could prompt the Fed to implement two precautionary rate cuts between September and December. Julius Baer believes the Fed may resume its rate-cutting cycle at the September FOMC meeting. The weakening economic outlook suggests the Fed will implement a more accommodative monetary policy in the second half of the year. Uncertainty surrounding inflation following the tariff increase and political pressure from President Trump to cut interest rates have hindered a rate cut this month. Beyond July, stagnant private consumption and reduced investment plans (indicating weakening demand) will justify a less restrictive policy stance despite above-target inflation. According to CME's "FedWatch," the probability of the Fed keeping interest rates unchanged in July is 96.9%, with a 3.1% probability of a 25 basis point rate cut. The probability of the Fed keeping interest rates unchanged in September is 35.4%, with a 62.6% probability of a cumulative 25 basis point rate cut and a 2.0% probability of a cumulative 50 basis point rate cut. While no rate cut is expected, a rate cut may already be largely priced in by the market given the persistently neutral tone in July. However, any dovish comments from Fed Chairman Jerome Powell could shift market sentiment. If Powell hints at a possible rate cut in September, the market may outperform expectations, pushing Bitcoin above $123,000 and setting a new high.

Probability of the Federal Reserve's target interest rate at the July FOMC meeting. Source: CME Group 2. Trump's Tariff Policy On July 28, Trump said he expected the United States to impose tariffs of 15% to 20% on countries that have not reached trade agreements with Washington. "I think it's going to be between 15% and 20%," Trump told reporters after meeting with British Prime Minister Starmer at his golf resort in Turnbury, Scotland. "It's probably going to be one of those two numbers." Trump said the United States will soon send letters to approximately 200 countries notifying them of the expected tariff rates on US exports. Trump imposed an additional 10% tariff on most countries starting in April, and tariffs on many other countries will increase starting August 1. Tariff agreements on three key sectors, steel and aluminum, chips, and spirits, remain pending. Trump said the EU has also pledged to purchase $750 billion in US energy products and invest an additional $600 billion in the US. In addition, the EU will make large-scale purchases of US military equipment. US Commerce Secretary Lutnick stated that Trump will make tariff decisions on other countries this week. He will consider several agreements this week and then determine the tariff rates. "For those countries that offer access, our negotiating table is ready." After announcing a major EU-US trade deal with US President Trump, European Commission President Ursula von der Leyen explained some of her decisions in trade negotiations with the US. Von der Leyen stated that the EU remains overly dependent on Russian liquefied natural gas (LNG), so more affordable LNG imports from the US are highly welcome. Regarding tariff arrangements, von der Leyen confirmed that the agreement sets a uniform 15% tariff on the automotive sector. She stated that a 15% tariff level is the best outcome the European Commission can achieve under the current circumstances. She also confirmed that the EU and the US have reached an agreement on a uniform 15% tariff rate for the pharmaceutical sector. Von Enlein acknowledged that the EU and the US have yet to reach a decision on the spirits sector, and that details of the framework trade agreement signed that day will be announced in the coming weeks. On the same day, German Chancellor Angela Merz stated that he was dissatisfied with the tariff agreement reached between the EU and the US, and that the 15% tariff imposed by the US on EU goods would be a significant burden on Germany's export-oriented economy. However, Merz also acknowledged that the current US tariff rate on EU goods has been reduced by half from the previously announced 30% rate, and that he could not expect a better outcome.

Mosaic Asset noted: "Easing trade tensions and liquidity tailwinds have driven the S&P 500 to new highs, while volatility has fallen to its lowest level since the beginning of the year. M2 has bottomed out since 2023 and is now setting new highs along with major stock indices." Throughout the history of the cryptocurrency market, the performance of Bitcoin and cryptocurrencies has been closely correlated with global M2 liquidity trends. 3. Hong Kong's Regulatory Regime for Stablecoin Issuers to Take Effect On August 1, the Stablecoin Ordinance will come into effect. The Hong Kong Monetary Authority (HKMA) has announced a six-month transitional arrangement for institutions previously operating in Hong Kong with stablecoin issuance. These arrangements will include issuing temporary licenses to issuers capable of complying with regulatory requirements. Issuers that fail to meet the relevant requirements within three months of the Ordinance's entry into force will be required to wind down their Hong Kong operations in an orderly manner within four months of the Ordinance's entry into force. If the Monetary Authority is not satisfied that an issuer is able to meet the licensing criteria and regulatory requirements, the issuer must wind down its Hong Kong operations in an orderly manner within one month of receiving notice of refusal. On July 29, the Hong Kong Monetary Authority (HKMA) published the "Guidelines on the Supervision of Licensed Stablecoin Issuers" and the "Guidelines on Combating Money Laundering and Counter-Terrorist Financing (for Licensed Stablecoin Issuers)," along with consultation conclusions on the regulatory regime for stablecoin issuers, which will take effect on August 1, 2025. Both sets of guidelines were gazetted on August 1, 2025. The Hong Kong Monetary Authority (HKMA) also released the "Summary of the Licensing Regime for Stablecoin Issuers" and the "Summary of Transitional Provisions for Existing Stablecoin Issuers" related to the licensing system and application procedures. The HKMA stated that no licenses have been issued as of today. Institutions interested in applying for licenses are encouraged to contact the HKMA on or before August 31, 2025, so that the HKMA can convey its supervisory expectations and provide appropriate feedback. Licensing will be an ongoing process. If individual institutions believe they are fully prepared and wish to be considered as soon as possible, they should submit their applications to the HKMA on or before September 30, 2025.

Stablecoins are extremely popular in Hong Kong. On July 23, Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, published an article entitled "Stablecoins for a Long-Term Future", which warned against excessive speculation and strict prevention of financial risks. "We need to guard against excessive market and public opinion speculation. Recently, there are several phenomena that deserve our attention: first, over-conceptualization, but even more concerning is the trend toward a bubble." Everbright Securities released a research report stating that the global retail cross-border payment market will reach $39.9 trillion in 2024. FXC Intelligence predicts this will increase to $64.5 trillion by 2032, with a compound annual growth rate of 6.2% from 2024 to 2032. In businesses such as cross-border RMB clearing and multi-currency settlement, third-party payment institutions have become deeply embedded in the entire payment service ecosystem, playing a vital role. Stablecoins are expected to drive the global expansion of RMB cross-border payment infrastructure and diversify their application scenarios, leading to potential revenue growth for third-party payment companies. In the long term, there is broad potential for the development of compliant stablecoins, which will help standardize the stablecoin market, enhance investor confidence, and promote market expansion. 4. US Q2 GDP Data to be Released

Data released by the US Department of Commerce on Tuesday showed that the goods trade deficit narrowed 10.8% from the previous month to $86 billion in June. The figure, unadjusted for inflation, was lower than the forecast of all economists surveyed by Bloomberg.

The latest US June goods trade data prompted some economists to raise their estimates for second-quarter gross domestic product (GDP), which will be released on Wednesday. Analysts believe that the trade imbalances that dragged down US GDP at the beginning of the year are expected to have largely reversed in the latest quarter.

According to the Atlanta Federal Reserve's real-time forecast, GDP growth rates for Q2 2025 are 2.90% and 2.38%.

Goldman Sachs previously raised its second-quarter GDP growth forecast from -0.3% to 2.4%, suggesting that the first-quarter GDP data may be underestimated. Moody's Analytics forecasts 1.5% full-year GDP growth for 2025, but believes the second-quarter figure may be slightly higher, noting that the US economy will be in a "weak expansion." If the US Q2 GDP data beats expectations, the positive economic outlook will boost investor risk appetite, with some funds flowing into the crypto market. Friday's July non-farm payroll report is expected to confirm cautious hiring by businesses. After a surge in education sector employment in June, job creation is expected to slow this month, with the unemployment rate likely to rise slightly to 4.2%. The US government's June personal income and expenditure report is expected to show a slight month-over-month acceleration in the Federal Reserve's preferred core inflation measure, suggesting that tariffs are only gradually being passed on to consumers. Citi analysts stated in a recent research report that any signs of weakness in the US labor market would trigger a more dovish reassessment of the Federal Reserve's outlook, driving a new round of decline in the US dollar and prompting investors to seek new investment channels, increasing the appeal of cryptocurrencies. Citi predicts that non-farm payroll growth will slow to 100,000 in July, and the unemployment rate may rise to 4.2%. 6. Tech Giant Earnings Season Microsoft, Meta, Apple, and Amazon will release their earnings reports over two days this week. Their combined market capitalization of $11.3 trillion will be a key test of whether the S&P 500 can continue its upward trend. According to media reports, of the approximately one-third of S&P 500 companies that have reported, approximately 82% have exceeded earnings expectations, putting them on track for their best quarterly performance in nearly four years. However, analysts have significantly lowered their expectations in recent months, primarily due to concerns about the impact of tariffs on consumer spending and profit margins. Earnings forecasts for large tech companies have also been lowered. Data shows that Mag7's second-quarter earnings are expected to grow by 16% year-over-year, down from the 19% forecast at the end of March. Meanwhile, the S&P 500's annual earnings growth is expected to be 4.5%, also down from the 7.5% forecast in March. If earnings are positive, this will boost overall market optimism and increase capital activity, potentially leading to increased inflows into the crypto market. If earnings fall short of expectations, market confidence will be dampened, leading to increased demand for safe-haven assets and a potential outflow from the cryptocurrency market. What is the future of the crypto market? While the short-term market structure suggests a bullish recovery, the long-term pattern suggests that BTC's bullish momentum may be waning. A double top pattern may form near its all-time high, reflecting buyer weakness. Failure to break through the $123,200 daily supply area would validate this bearish pattern, hindering price discovery. Bitcoin’s daily relative strength index fell sharply from 74.4 to 51.7, indicating spot market weakness, while daily trading volume fell to $8.6 billion, both indicating declining market participation. Flows into spot BTC exchange-traded funds (ETFs) also fell 80% from the previous week, from $2.5 billion to $496 million, suggesting cooling interest from institutional investors. While futures open interest remained high at $45.6 billion, the increase in long funds suggests growing overconfidence in the market. Furthermore, 96.9% of the supply remains in profit, suggesting a high likelihood of profit-taking. Historical returns in August further support this view. Over 60% of funds closed in the red in August, with an average return of 2.56%, suggesting seasonal headwinds for the upcoming month. Coupled with weakening on-chain activity, such as a decline in active addresses and transfer volume, BTC prices could experience a pullback in the coming weeks. BTC historical average monthly return. Source: Axel Adler Jr. The latest research from the on-chain analysis platform CryptoQuant believes that the stablecoin supply ratio (SSR) has been growing in tandem with BTC/USD, which may indicate a lack of stablecoin liquidity or "dry powder" available for investment.

Contributor Arab Chain believes: "The rise in this indicator shows that the number of stablecoins is small compared to the trading volume of Bitcoin. In other words, liquidity is weak, so the market lacks high purchasing power to support Bitcoin. The rise in this indicator, as well as the rise in Bitcoin prices, shows that this rise is occurring without new stablecoins entering at the same rate. The continued rise in this indicator may indicate that future buying momentum may weaken due to low liquidity." The market may be entering a period of "temporary saturation."  “The market remains partially supported by liquidity, but a continued rise in Bitcoin requires a substantial increase in stablecoin reserves in the coming days.”

Bitcoin SSR and BTC/USD chart. Source: CryptoQuant

Trader Crypto Tony predicted: “If Bitcoin can tighten and hold above $117,000, then I think we will soon hit a new all-time high.”

Rekt Capital said: “For now, BTC needs to avoid breaking through the bull flag top resistance level, otherwise the price will remain range-bound.”