Macroeconomic factors and capital flows affect the Crypto Assets market, entering an adjustment period.

Recently, the Crypto Assets market has been influenced by multiple factors and has entered a phase of adjustment and consolidation. The uncertainty of the macro environment has increased, suppressing market risk appetite. The expectation of the Federal Reserve delaying interest rate cuts, along with rising tariffs and geopolitical risks, has created pressure on the market.

In terms of capital flow, although there has been marginal repair, the structural differentiation is obvious. After a strong inflow of ETF funds at the beginning of the month, this week has seen a net outflow, stablecoin issuance is moderate, and the OTC USDT premium has fallen below par, reflecting a cautious attitude towards capital.

Against this backdrop, mainstream coins show a divergent trend. Bitcoin remains relatively strong but the upward momentum is weakening, while Ethereum shows signs of weakness and bottoming out, with a weak ETH/BTC ratio. Meanwhile, the liquidity in the small-cap altcoin market has clearly dried up, and risks continue to be released. The TOTAL2 indicator declines in sync with TVL, and the market capitalization share of OTHERS breaks downwards, indicating that the market is currently in a risk release period.

In the medium to long term, the large scale of U.S. debt and the issue of fiscal deficits may weaken long-term confidence in the dollar, potentially driving investors towards safe-haven assets like Bitcoin. Although expectations for future interest rate cuts by the Federal Reserve have been delayed, the market still anticipates a possibility of rate cuts in the second half of 2025, which will increase liquidity and benefit risk assets like Bitcoin.

On-chain data shows that the supply of long-term holders has reached a new high in nearly six months, at about 14.4 million coins of Bitcoin, reflecting an increase in long-term capital confidence. The supply of short-term holders has been declining since the beginning of the year, with a slight recent rebound, possibly reflecting that some short-term traders are starting to buy the dip.

Overall, the current market has entered a defensive consolidation phase, and it is recommended to maintain a relatively conservative position allocation. Investors should closely monitor the strength reversal points of Ethereum's trend and the rhythm of capital inflow, and consider allocating to high-risk assets only when market sentiment improves. At the same time, continuous attention should be paid to the potential impact of external factors such as macroeconomic data and Federal Reserve policy trends on the market.