QCP Asia Market Watch: BTC is stuck at the $120,000 level, ETH faces resistance at $4,000, and the dollar short positions squeeze may pose short-term risks to the crypto market.

QCP Asia's report on July 30 pointed out that Bitcoin continues to fluctuate narrowly below the key resistance level of $120,000, with solid buying at the support level of $116,000; the momentum for Ethereum to break through the psychological barrier of $4,000 is weakening. Despite continuous institutional accumulation (such as MSTR and SBET fundraising to buy coins) and the passage of crypto-friendly legislation in the U.S., the price response is weak, revealing short-term fatigue. A more urgent risk lies in the global macro level: extremely crowded dollar short positions (especially USDJPY) face the risk of a squeeze, which could trigger cross-market dumping. Investors need to closely follow the upcoming U.S. inflation and employment data and the Fed's interest rate decision in September, as the third quarter may become a key turning point.

BTC/ETH is in a technical deadlock, and the favourable information is showing fatigue Bitcoin prices continue to fluctuate within a narrow range, struggling to effectively break through the important psychological and technical resistance level of $120,000. On the downside, the $116,000 area shows sustained institutional buy support. Ethereum's upward momentum also shows signs of fatigue, with its momentum indicators gradually shifting to neutral as it approaches the $4,000 mark. From a market structure perspective, the continuous influx of institutional funds (like spot ETFs) and positive regulatory developments in the U.S. crypto space still provide a solid foundation for reaching new historical highs in the medium term. The actions of listed companies like Strategy (MSTR) and SharpLink Gaming (SBET) to continuously raise funds and increase their Bitcoin positions further highlight the long-term capital's firm confidence in this asset. However, caution is needed for short-term overheating signals—recently, the market's response to a series of significant favourable information has been tepid, and this "favourable information has run out but does not rise" situation is historically a typical characteristic of the late stage of an upward cycle, suggesting that short-term momentum may be waning.

USD short positions become a powder keg, squeezing risks threaten risk assets Global macro-level risks are emerging: extremely crowded short positions in the dollar. The "weak dollar" narrative that has dominated the market in 2025 (mainly due to the escalation of the China-U.S.-Europe tariff war) has driven the dollar index down 10% this year. CFTC position data shows that traders hold historically large net short positions in the USDJPY currency pair, which are not only highly correlated but also maintain high costs. QCP warns that the market's vulnerability to a dollar short squeeze is sharply increasing. If the dollar unexpectedly rebounds, it could force cross-market (stocks, emerging markets, cryptocurrencies) risk-off deleveraging operations, triggering a chain dumping.

The tariff war has temporarily paused but remains unresolved, while geopolitical policy games continue Despite the temporary tariff truce agreement reached between the US and EU, the global trade tensions have not fundamentally eased. The Trump administration's efforts to resolve the Russia-Ukraine conflict have faced widespread indifference in the international policy arena, and the market expects that it may ultimately concede. The cost of tariffs is gradually being transmitted to corporate profit margins and end consumer prices, and its inflationary effects will become apparent in the coming months.

Macroeconomic Data and Fed Policy as the Key to Victory in the Third Quarter The inflation (PCE/CPI) and employment (non-farm) data to be released in the coming weeks are crucial and will determine the market direction in the third quarter. This data is the core basis for the Fed's policy-making. The market generally expects the July FOMC meeting to maintain the interest rate, but policymakers are likely to emphasize "data dependence going forward." The real focus is on the September meeting—currently, the expectation for rate cuts is in a delicate balance. Given the tariff's role in pushing up inflation, the third quarter could become a key turning point for monetary policy and market expectations.

Conclusion: The cryptocurrency market is currently caught in a tug-of-war between technical and emotional factors, with institutional long-term layouts and the dulling of favourable information creating conflicting signals. Investors must be alert to the cross-market volatility transmission risks triggered by USD short positions while monitoring key price level breakthroughs for BTC/ETH. Upcoming macro data (especially inflation) and the guidance from the September FOMC meeting will determine the fate of risk assets in the third quarter. It is recommended to appropriately adopt options strategies to hedge tail risks in an environment of rising volatility expectations, and to pay attention to the institutional support strength at key support levels such as $116,000 (BTC) and $4,000 (ETH).