Author:Jessica Feng (@Jf4172), Investment Manager of Hash Global BNB Fund;
Henry Yang (@ARSHenry1), Investment Partner, Head of Hash Global Secondary Market Funds.
Over the past six months, the booming AI market has almost captured the market's full attention, even shaking the last bastion of faith in Crypto - Bitcoin. Since falling below $70,000 in February, BTC has tested the $58,000–$60,000 range three times. Veteran players in the industry—Strategy—have begun selling coins, mining companies are shifting to AI, and the dim industry outlook has made each wave of panic feel more real than the last.
While US stocks continue to climb and gold rebounds from its lows, Crypto seems to have been forgotten by the world: BTC has been consolidating between $62,000 and $65,000 for nearly two months, with the 30-day implied volatility once dropping to 36%, hitting multi-year lows. The lifeless market conditions make it difficult for the public to be optimistic.
Recently, however, we have been focusing more on the "changes" and "perspectives"—the shifts happening beneath the price surface.
The forces that previously weighed down the market are weakening one by one: expectations for macro tightening are cooling, the Strategy blow-up crisis is easing, and institutional fund outflows have ceased.
Meanwhile, on-chain Bitcoin holdings are re-accumulating amidst the consolidation.
Everything seems to signal an approaching inflection point, but these changes have not yet been reflected in the price because the market is waiting for clearer signals.
Outside the market, AI trading is cooling down, and funds are about to begin a new round of allocation switching. Inside the market, veteran OGs are still waiting for the final dip and have yet to act. This moment of calm on the surface precisely offers us the best entry angle and timing.
Predicting exactly when the rally will start is difficult, but what can be grasped is that we are entering the time window to position for the next cycle.
I. Beneath the Unchanging Price, the Holdings Structure is Being Reshuffled, a New Bottom is Forming
BTC has tested the $60,000 level three times, and each time it has found clear support.
Subsequently, the price rebounded to around $65,000, where selling pressure re-emerged, and the market fell back into repeated fluctuations between $63,000 and $65,000. On the surface, the price has hardly changed, but on-chain holdings have quietly undergone a round of redistribution.
Currently, over 2.4 million BTC have settled in the $61,000–$65,000 range, accounting for about 12% of the circulating supply; of this, over 1 million BTC are concentrated around $63,000 alone, representing about 5.2% of the circulating supply. The degree of concentration has risen to historically rare levels.
This change deserves more attention than short-term price movements. Bottoms do not appear suddenly; they are "bought out" by the market through repeated tugs-of-war: some exit, while others take positions; old holdings are constantly transferred, and new capital re-establishes a cost basis at lower levels. As more and more BTC clusters around similar price levels, a new price consensus is also being established.
Therefore, changes in momentum often precede price. Looking back at history, between May and November 2024, BTC also experienced a half-year adjustment after the ETF rally. Before rising from $60,000 to $100,000, the chain also showed a highly concentrated structure around the $50,000–$60,000 range. In hindsight, the bottom formed then was the springboard for the subsequent rally.
History doesn't simply repeat, but a similar holdings structure indicates the market is undergoing a similar bottoming and transfer process.
II. A Directional Choice Approaches, the Forces Suppressing the Market are Crumbling
Holdings concentration represents intensified contention, meaning the market is about to make a choice, but it alone cannot predict the direction.
What truly tilts the balance upward is that the several forces that drove the market down are weakening.
1. Macro Pressure Easing, Interest Rate Hike Risk Diminishing
The most important driver behind this round of adjustment has been market concerns over higher interest rates.
Geopolitical conflicts fueled inflation expectations, the Fed released hawkish signals, US Treasury yields and the dollar strengthened, naturally pressuring risk assets.
Recently, however, this high-interest-rate pricing logic has begun to loosen.
US CPI for June fell 0.4% month-over-month, the largest single-month drop since April 2020; core CPI was flat month-over-month, below market expectations. Meanwhile, July non-farm payrolls decreased by 23,000, also significantly weaker than expected.
Inflation is cooling, and employment is weakening. This marginal change has reversed the conditions for the market's previous tightening pricing.
When this expectation loosens, the pressure on risk assets naturally lessens.
2. Blow-up Crisis Cooling, Strategy Embarks on a Third Transformation
Over the past few months, FUD surrounding Strategy further amplified panic. Many believed Strategy's capital structure was problematic, and the largest buyer supporting this cycle would turn into a structural seller that could overwhelm the market during a downturn.
Due to these concerns, STRC once fell to $74, and MSTR's mNAV also dropped below 1x.
However, after Strategy actually began selling coins, the market's reaction gradually diminished. Behind this "desensitization" lies the market's evolving understanding of Strategy's tactics.
To date, Strategy has sold a total of 0.26% of its BTC holdings, boosting cash reserves to about $4.5 billion, sufficient to cover approximately 3 years of interest payments. It has also significantly repurchased discounted STRC, continuously reducing its debt scale at low cost. The market is gradually realizing that Strategy's series of operations precisely constitutes a transformation—from passive holding to active capital management, cutting off the negative spiral the market feared.
By contracting positions during the bear market, supplementing liquidity and stabilizing the capital structure through small-scale sales to ensure survival, Strategy preserves sufficient financing capacity to restart the flywheel in the next market cycle.
Recently, STRC has rebounded to around $95, and Strategy has resumed MSTR financing. Short-term funding pressure has eased, reducing the risk of forced large-scale sell-offs.
This means one of the most concerning structural selling pressures is clearly weakening.
3. AI Trading Cools, Crypto's Allure for Allocation is Rising, Possibly Attracting Fund Flows Back
Over the past six months, the AI sector has significantly diverted global capital.
Compared to narrative-starved Crypto, AI offered investment opportunities with more certain growth. Recently, however, AI trading has begun to cool.
As valuations continued to climb, growth expectations became fully priced in, and the crowded AI trade saw concentrated deleveraging in July: the Nasdaq 100 index fell about 7%, the S&P 500 was flat month-over-month, while previously oversold Crypto assets saw a counter-trend recovery: BTC gained about 6% for the month, ETH rose about 18%. Blue-chip DeFi assets with significantly improved fundamentals performed even stronger, with UNI surging over 100% for the month.
When funds begin looking for new allocation directions, undervalued crypto assets with improving policy and fundamental backdrops may re-enter the sight of capital.
III. Before the Tide Arrives, Position During the "Unclaimed" Period
Marginal improvement in pressure factors does not equal a full reversal, so it's premature to conclude that the rally has already arrived.
While the market waits for clearer signals, this precisely provides a valuable time window.
Legendary investor Stanley Druckenmiller, when reflecting on his investment in Teva Pharmaceuticals, spoke of the concept of the "Unclaimed Territory": value investors were selling due to strategic transformation, while growth investors were still on the sidelines as the transformation was incomplete. When neither type of capital had truly entered, it presented a structurally disjointed investment opportunity.
BTC currently faces a similar disjointed opportunity: Crypto hasn't started its move yet, funds driven by AI FOMO are still chasing the final feast; the long-awaited industry blow-up moment hasn't arrived, and old money within the industry is still waiting for the final dip.
At this juncture, what's truly worth pondering is, when the market steps into the unclaimed territory, do we dare to move ahead of the consensus and position ourselves early?
