US June CPI fell to 3.5% year-on-year, while core CPI remained nearly flat month-on-month. On the surface, inflation appears to have cooled significantly. However, New Fire Research Institute believes the market should not be overly optimistic. The decline in June CPI was primarily driven by energy contributions. Excluding food and energy, core goods prices continue to rise – up 0.7% in March, 0.7% in April, 0.2% in May, and 0.2% in June. The producer price index for core goods even reached 5.1% year-on-year. Federal Reserve Chairman Wash publicly stated that "this inflation data does not perfectly reflect the underlying inflation situation." Financial services and inpatient medical costs within core services are still rising, and core PCE in June is highly likely to record slight positive growth. More importantly, after taking office, Chairman Wash has repeatedly emphasized the Fed's independence and pledged "zero tolerance" for inflation. This means that even if inflation shows a short-term decline, the Fed will not easily shift to a dovish stance. If energy prices rise again later due to the Middle East situation, inflation expectations may resurface, and the Fed's hawkish posture would then exert sustained pressure on risk assets.
Running parallel to the inflation risk is the quadruple structural pressure facing memory semiconductors. Last week, Micron fell 13.3%, SK Hynix fell 18.24%, and South Korea's KOSPI index plunged 9.48%, triggering a circuit breaker. This is not ordinary profit-taking. Geopolitical risks are resurfacing, combined with significant gains driven by the AI theme, leading the market to question the sustainability of AI capital expenditures—when massive investments will translate into actual returns has become a core concern for investors. The most alarming factor is the deleveraging process in the South Korean market. South Korea's margin debt and leverage ratios are at historical extremes. Regulators have stepped in to assess the systemic risks of single-stock leveraged ETFs, and several brokerages have raised margin requirements. However, deleveraging is still some distance from being completed, and market volatility will remain amplified in the short term.
Compared to the severe volatility in traditional markets, the cryptocurrency market performed steadily last week, with BTC rising 1.3% and ETH rising 3.4%, successfully achieving independent performance. US spot Bitcoin ETFs transitioned from large net outflows to sustained net inflows, Coinbase's negative premium continued to narrow, and the Robinhood Chain ecosystem exploded—its DEX transaction volume in the first week exceeded $3.1 billion, entering the global top five, and on-chain stablecoin balances remained above $260 million. On the policy front, the US Senate is expected to advance the review of the "CLARITY Act" this week. The bill is currently listed as number 423 on the legislative calendar, with the main obstacle being addressing Democratic concerns regarding stablecoins and anti-money laundering compliance. The period before the August recess is the last realistic window for passage within 2026.
In summary, the probability of cryptocurrencies achieving an independent bull run in the short term is low. Against the backdrop of rising risks of inflation resurgence, the Fed maintaining a hawkish stance, and increasing global stock market volatility, risk assets overall are under pressure, making it difficult for cryptocurrencies to remain immune. However, the fundamentals of the cryptocurrency market continue to improve. Sustained ETF inflows, narrowing Coinbase premiums, and increasing on-chain ecosystem activity all indicate that bottom support is strengthening. Technically, BTC and ETH have shown strong support at the daily moving averages and the middle band of the Bollinger Bands, recently exhibiting a decent trend of volatile rebounds. New Fire Research Institute maintains its previous judgment that Bitcoin around the $60,000 level remains in a high-value configuration range. At current levels, downside risks are relatively controllable, while upside potential depends on when the macroeconomic environment shifts and the progress of policy catalysts such as the CLARITY Act. Waiting for secondary confirmation signals of market bottoming combined with a macroeconomic shift will be the key moment to initiate a true bull market.
