Crypto Assets Market Weekly Report: BTC and ETH Consolidating at High Levels, Funding Sentiment is Cautious

Market Overview

From July 15 to 28, the crypto market experienced high-level fluctuations and consolidation, with BTC and ETH both entering a sideways range after breaking through the previous high points. Short-term momentum is tending to stabilize, but the overall structure maintains a bullish pattern.

Regarding BTC, after reaching a historical high of 123,000 USDT on July 14, it entered a high-level consolidation range, with the price repeatedly testing around 119,000 USDT. Technically, the short-term moving averages are showing a converging state with the MA30. Although the MACD briefly formed a golden cross, the momentum bars are slowing down, and the price lacks further volume to break through support. The trading volume has continued to shrink after the peak, reflecting a decline in the market's willingness to chase prices. Nevertheless, the overall support level remains stable, with significant buying strength in the 115,000-116,000 USDT range.

From a fundamental perspective, the Bitcoin ecosystem continues to expand, with annual on-chain transaction volume officially surpassing Visa, marking its payment attributes gradually gaining recognition in the global capital markets. At the same time, on-chain liquidity is tightening, and institutional holdings continue to rise, reinforcing BTC's role as "digital gold" and a core collateral asset. A certain public chain has recently completed its 2.0 upgrade, aiming to enhance Bitcoin's yield capability and cross-chain applications, introducing more practical use cases for BTC, which is expected to drive long-term value reassessment.

In terms of ETH, it has shown a relatively stable upward trend in the past two weeks. ETH started at around 3,550 USDT, gradually climbing along the short-term moving averages, and approached the 4,000 USDT mark on July 28, with a complete technical structure. The MACD continues to expand, and the moving averages are in a bullish arrangement, indicating that momentum remains stable. Although there has not been explosive growth in trading volume, the moderate increase in volume coupled with the trend shows that market participation willingness is gradually rising.

In terms of volatility, BTC has maintained a mild fluctuation overall, only experiencing brief amplifications on certain trading days. The overall rhythm is relatively stable, indicating that the main market funds have a clear operational rhythm and strong trend expectations. In contrast, ETH's volatility has seen multiple significant surges after mid-July, especially around July 16 and 25, where the amplitude rapidly increased, reflecting greater divergence in the market regarding its breakout direction, with active short-term testing and trading behavior.

Despite both having volatility that has not deviated from historically low ranges, the recent repeated increase in ETH's volatility indicates that market sentiment is relatively sensitive and can easily amplify reactions driven by short-term news or capital. If trading volume subsequently increases, it cannot be ruled out that it may prompt a directional choice for ETH, requiring continuous attention to whether its price fluctuations translate into a trending market.

Long-Short Ratio and Funding Rate Analysis

According to data platforms, the Long-Short Ratio (LSR) for BTC has been oscillating downward overall. Although the price remains in a high range, the long-short ratio has failed to sustain at a bullish level, dipping below 1 multiple times, and even falling below 0.90 on July 28. This reflects a weakening willingness to chase prices at high levels in the market, with short-term funds becoming more conservative, indicating that although the BTC structure remains strong, the market heat is cooling down. Overall, the decline in the long-short ratio after BTC reached new highs shows that short-term optimism in the market has weakened, with some funds choosing to gradually reduce positions or remain on the sidelines.

The long-short ratio for ETH shows characteristics that are decoupled from price trends. Although the price has steadily increased since July 15 and is approaching 4,000 USDT, the long-short ratio has gradually weakened since mid-July, remaining around 0.95 and even briefly falling below 0.90, indicating that market capital operations are relatively cautious and there may be doubts about the sustainability of ETH's rise. The LSR has been at a bearish level for several consecutive days, reflecting a preference for tentative short positions among short-term funds. Although the market has risen, the sentiment has not strengthened in sync.

In the past two weeks, the funding rates of BTC and ETH have oscillated slightly around the zero axis, indicating a stalemate between bullish and bearish forces in the market. Investors' willingness to chase prices is limited, and leveraged funds have not entered on a large scale. While prices remain high, the funding rates have not shown a significant increase, reflecting that this round of price rise is more driven by spot and low-leverage funds. The market structure is relatively robust, which helps avoid short-term bubble risks.

From the trend, the funding rate of ETH has briefly turned negative multiple times during this period, especially from July 24 to 26, when it fell deeply, reaching a low of nearly -0.015%. However, it quickly recovered, not triggering large-scale liquidations or price reversals, indicating that the overall market has good resilience. It is worth noting that the funding rate of BTC fluctuates relatively little, showing high stability, which indicates that institutions and stable funds still prefer to allocate to it; while the funding rate of ETH is slightly more volatile, reflecting the market's differences regarding its subsequent trends, making the operations more trade-oriented.

Contract Market Analysis

According to data platforms, the overall position amount of BTC and ETH contracts remains in a high-level fluctuation, indicating that after the market leveraged funds actively entered the market earlier, they have now entered a wait-and-see phase or high-position game state in the short term. The position amount of BTC contracts has tested the range of 85 billion to 88 billion USD multiple times since mid-July, although it has not significantly broken through, the overall water level is still maintained at a high level for nearly a month; the position of ETH contracts has continued to grow steadily, breaking through 50 billion USD in mid-July, and remaining around 57 billion USD as of July 28, setting a new high for the year.

It is worth noting that the growth rate of ETH contract positions in mid to late July was significantly faster than that of BTC, reflecting a more active market willingness to leverage bets on ETH's subsequent market movements, which also corresponds to the trend of its spot price gradually rising and the increasing heat of funds.

Overall, both BTC and ETH leveraged funds are actively operating at high levels, with market risk appetite maintaining a recovery trend. However, as prices and leverage levels are synchronously at relatively high ranges, if market volatility intensifies in the future, it cannot be ruled out that it may trigger a phase of concentrated liquidation pressure. It is recommended to continuously monitor changes in open positions and liquidation risks to prevent abrupt shifts in market sentiment.

The overall structure of liquidations in the crypto market over the past two weeks has maintained a balance of tension, without any systemic crashes or concentrated liquidations. However, there have still been localized liquidation surges during the phase of oscillation. On the long position side, there were two significant liquidation waves on July 18 and July 23, with the latter reaching a single-day liquidation amount of $630 million, the highest value in this phase, indicating that funds chasing high positions encountered reverse liquidations during the oscillation washout. While there is still upward momentum in the market, the pace has clearly slowed down.

The short positions liquidated were relatively mild, only seeing concentrated stop-loss volume on July 18 when the market surged, while the rest of the time maintained a low level overall, reflecting that short funds are operating more conservatively, with attempts to "top out" not triggering large-scale liquidations.

Performance of Quantitative Strategies

Under the current background of structural bullishness and restrained capital rhythm, the foundation for the continued rise of Crypto Assets still exists. However, after the market enters a high-level consolidation, short-term emotional fluctuations have intensified, and both chasing gains and shorting face phase risks. Market rhythms are becoming increasingly differentiated, and investors need to utilize more precise technical tools to grasp trading rhythms and risk control.

This report uses a trend-following strategy based on the MACD indicator to backtest the top ten crypto assets by market capitalization. The core logic of the strategy is: buy when the MACD shows a golden cross, and set a 1% fixed stop loss and a 15% fixed take profit. The backtesting period is from May 2024 to July 2025.

The results show that the strategy performed excellently across most coins, especially with cumulative returns exceeding 100% for both SUI and TRX. Among them, the SUI strategy performed the best, steadily climbing since October 2024, reaching a peak in the middle of 2025, with cumulative returns ranking first among all coins. In contrast, the traditional Buy and Hold strategy experienced significant volatility during the same period, especially with ETH, which saw a maximum drawdown of over 50% at one stage.

Although most coin strategies may not have a win rate higher than 50% in backtesting, the strategies achieve continuous accumulation of profits by controlling losses and prolonging gains through clear entry and exit disciplines and asymmetric profit and loss structures. This design highlights the importance and effectiveness of risk control systems and position management in low win rate environments.

Overall, the MACD trend strategy achieves a good balance between profitability, drawdown control, and capital utilization efficiency, making it particularly suitable for market structures with medium to high volatility and unclear trends. In the future, further incorporation of volume confirmation, moving average filtering, or multi-period signal resonance mechanisms could enhance signal accuracy and expand to a multi-factor, multi-asset quantitative strategy framework, continuously improving the adaptability and scalability of the strategy.

Summary and Outlook

From July 15 to July 28, 2025, the cryptocurrency market maintained a structurally bullish pattern overall, with mainstream assets experiencing high-level fluctuations and consolidations. The technical structure and fundamentals remain relatively healthy. However, from key indicators such as the long-short ratio, funding rates, and liquidation structure, short-term market sentiment is becoming cautious, with a conservative pace of capital inflow and leverage momentum not yet fully released. Although BTC and ETH are both operating at high levels, the tug-of-war between long and short forces continues, and the market rhythm is gradually shifting towards fluctuating games and tentative repetitions.

The subsequent market trend will highly depend on the further evolution of the funding situation and trading structure, especially factors such as transaction volume alignment, funding rate recovery, and position stability, which may create catalytic conditions for trend continuation. If prices break out with increased volume after consolidating at high levels, accompanied by simultaneous strengthening of technical indicators, mainstream assets are expected to initiate a new round of upward cycles; conversely, if the consolidation period continues to drag on and market divergence intensifies, the possibility of a temporary pullback or turnover consolidation cannot be ruled out.

At a key point where the current structure leans bullish but disagreements are rising, short-term strategies should focus more on rhythm control and risk management, flexibly combining trend tools and position management to steadily seek certain opportunities in complex market conditions. The MACD trend strategy tested in this report performed well in backtesting, demonstrating its robustness and profit potential in high-volatility markets. If the signal generation mechanism and risk control system can be further optimized in the future, it is expected to continuously enhance the strategy's adaptability and practical value in different market environments.