Nowadays, events from a few days ago often feel like they happened weeks ago. This is likely because important events are continuously occurring in various parts of the international community.
Last week seemed to be the time when this atmosphere was most prominent. Until the weekend, we were concerned about the global energy supply chain crisis due to the US bombing of Iranian nuclear facilities. Bitcoin price, which had maintained a steady inflow despite Middle Eastern conflicts, was strongly pushed to around $98,000. However, this situation was dramatically resolved in just two days.
Surprisingly, the key to resolving the situation was Iran's attack on the US Air Force base. On the 24th, Iran launched 14 missiles at the US Air Force base in Qatar after notifying the US in advance. The US, having been pre-informed, intercepted all missiles without gaps, and then President Trump suddenly declared a ceasefire between Israel and Iran in the Middle East region.
The experts' prominent explanation that came later is as follows. The US could not avoid bombing Iran's nuclear facilities where highly enriched uranium is stored due to its strict policy of prohibiting nuclear proliferation. However, at the same time, they did not want the domestic prices they had barely controlled to rise again due to soaring oil prices. So, they chose to save face by striking the nuclear facilities with bunker buster missiles and allowing Iran to attack US bases. Anyway, the intense Middle East conflict between Israel and Iran was resolved in just one day, like a cartoon.
Funds Continuously Entering through ETFs... Traditional Whales Start Selling
In the US mainland, discussions about inflation and interest rates were busy. From the beginning of the week, Michelle Bowman, Vice Chair of Bank Supervision at the Federal Reserve, drew attention by raising the possibility of a July rate cut. Austin Goolsbee, President of the Chicago Fed, also mentioned the possibility of a July rate hike on the same day. Following Christopher Waller, a Federal Reserve Board member who first mentioned a July rate cut two weeks ago, there are now three "July cut advocates" in the Federal Reserve.
Jerome Powell, the Federal Reserve Chair who attended the congressional hearing last week, calmly responded that a July cut "is not impossible". However, he predicted that the impact of Trump's tariff policy would be directly reflected in the June and July inflation, and that inflation is likely to maintain a level that prevents a rate cut. Ultimately, while observing the data, the possibility of a September cut currently seems the highest.
Coincidentally, the May core Personal Consumption Expenditures (PCE) inflation released on the 27th did not show a clear downward trend. While headline inflation was as expected, core inflation was 0.1 percentage points above expectations.
Interestingly, Bitcoin price has been stably trending upward, ignoring all these adverse conditions after the Middle East ceasefire. This is because whales did not sell during the heightened war situation, while sufficient selling came mainly from retail investors. The price, which had been hovering in the early $100,000 range, quickly rose to around $106,000 after the ceasefire and even exceeded $108,000 over the weekend. This was largely due to the Bitcoin spot ETF, which had been experiencing steady fund inflows. However, altcoin rises remain limited, possibly because a forced ceasefire was made while leaving seeds of conflict.
At a point where Bitcoin price is about 4% away from its previous high of $112,000, whether it will see further increases or another correction seems difficult to predict. First, on-chain indicators are mixed. While funds are entering through ETFs, traditional whale investors are disposing of coins. In essence, there is a transfer of ownership between new buyers entering through ETFs and traditional Bitcoin buyers.
Ethereum is similar. While there was temporary mixed trading two weeks ago, last week saw funds flowing into Ethereum spot ETFs again. The pattern of individuals selling while institutions buy is also appearing with Ethereum. Altcoins like Solana (SOL), Aptos (APT), and others dreaming of new ETF approvals have been showing signs of movement throughout the week.
US: 'We Rested from Middle East Conflict, Shall We Try a Tariff War Again?'
There are three major macroeconomic schedules to watch this week. First, the US government appears to be toying with the tariff war card again. The US government decided to suspend mutual tariffs set against countries worldwide for three months last April. As this measure is only valid until July 8th, attention is focused on whether the US will extend the suspension.
The second schedule is the potential passage of the OBBB bill pending in the US Senate. This bill is the area President Trump is most focusing on, and if passed, it could significantly impact US Treasury prices and interest rates. The Trump administration aims to process this bill by July 4th (Friday), Independence Day. As it passed the procedural vote last Saturday, the likelihood of processing within the deadline has increased.
Lastly, it is necessary to carefully observe the employment indicators that will be released in bulk. On the 1st (Tuesday), the U.S. Department of Labor's job openings and turnover report will be released. In addition, the U.S. non-farm employment figures are scheduled to be announced on the night of the 3rd (Thursday). Although Jerome Powell, the chairman, recently asserted at a press conference after the Federal Open Market Committee (FOMC) that U.S. employment is robust, the data shows that the number of continuous unemployment benefit claims not returning to work for more than a month is increasing at a faster rate compared to the previous year. It is possible that a decline in employment, rather than inflation, could bring an unexpected timing for interest rate cuts.
In summary, the tariff war, which had been quiet for a while due to Middle Eastern conflicts, is likely to be fully reignited from the latter part of this week. The key is whether the U.S. stock market, which has shown a strong performance reaching new highs, will continue to withstand the reignition of the tariff war. We wish our readers a successful investment this week.
