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Bitcoin (BTC) Holds $107K, But Altcoins Like Dogecoin (DOGE) and Ether (ETH) Show Profit-Taking Signs Amid Low Volatility | Flash News Detail | Blockchain.News
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7/2/2025 8:45:00 PM

Bitcoin (BTC) Holds $107K, But Altcoins Like Dogecoin (DOGE) and Ether (ETH) Show Profit-Taking Signs Amid Low Volatility

Bitcoin (BTC) Holds $107K, But Altcoins Like Dogecoin (DOGE) and Ether (ETH) Show Profit-Taking Signs Amid Low Volatility

According to @MilkRoadDaily, Bitcoin (BTC) is holding firm above $107,000, but its volatility has dropped to the lowest level since late 2023, as measured by Deribit’s DVOL index. Despite this stability, the broader crypto market shows signs of fatigue with major altcoins experiencing profit-taking. Dogecoin (DOGE) fell nearly 4% and Tron (TRX) slipped 5.5%, while Ether (ETH), Solana (SOL), and Cardano (ADA) also posted losses as they neared local resistance levels. Analysts from SignalPlus and HashKey Group note that the macroeconomic backdrop is improving, citing Circle's IPO and softer inflation data as positive signals for risk assets. However, traders are closely watching the upcoming U.S. Personal Consumption Expenditures (PCE) report, which Bitfinex analysts believe could trigger a crypto rally if the results are dovish. In derivatives, deeply negative perpetual funding rates for XLM, BCH, and APT suggest a potential for a short squeeze.

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Analysis

Bitcoin (BTC) demonstrated remarkable stability on Thursday, maintaining its position above the reported $107,000 level. However, this calm in the market's largest asset masked underlying tensions and emerging weakness across the altcoin sector. While Bitcoin's price held steady, a wave of profit-taking swept through major cryptocurrencies, suggesting trader caution is growing. Dogecoin (DOGE) saw a significant drop of nearly 4% to trade at $0.19, while Tron's TRX token slipped by a notable 5.5% to $0.27. This bearish sentiment was not isolated, as other large-cap assets including XRP, BNB, Solana (SOL), and Cardano (ADA) registered losses of up to 3%. Ether (ETH), which had recently outperformed BTC fueled by strong ETF inflows and bullish derivatives markets, also showed signs of exhaustion after briefly touching the $2,800 mark. This divergence, where Bitcoin holds firm while altcoins decline, often points to a flight to relative safety within the crypto space as traders de-risk from more volatile assets.



Macro Tailwinds Support Broader Market Optimism


Despite the profit-taking in altcoins, the broader macroeconomic environment appears increasingly favorable for risk assets, including digital currencies. According to Augustine Fan, Head of Insights at SignalPlus, mainstream sentiment has seen a noticeable turnaround. This shift is attributed to several key developments, including the successful IPO of Circle and the public listing intentions of other major crypto firms like Gemini and Bullish. Fan also highlighted the growing trend of corporate BTC treasury strategies, with companies looking to emulate MicroStrategy's playbook, alongside excitement around stablecoins in both traditional finance and on-chain applications. This positive sentiment was echoed by Jeffrey Ding, Chief Analyst at HashKey Group, who pointed to progress in U.S.-China trade relations and a softer U.S. inflation print as encouraging signs that ease global economic pressures and create a more stable outlook for growth.



Institutional Flows and Volatility Contraction


The institutional narrative continues to be a powerful driver of the current market cycle. Thomas Perfumo, an economist at Kraken, noted that the broad rally reflects crypto's evolving role as a macro hedge against real yield volatility and fiscal deficit concerns. He described a "virtuous cycle" where structural vehicles like spot ETFs are absorbing supply at a much faster rate than anticipated, especially within a more favorable U.S. regulatory landscape. This sustained institutional bid is creating a strong support floor for Bitcoin. In a sign of market confidence and reduced trader anxiety, Deribit’s BTC Volatility Index (DVOL) has fallen to 37, its lowest point since late 2023. However, Jean-David Péquignot, Deribit's Chief Commercial Officer, cautioned that the $105,000 level for BTC remains pivotal from a technical standpoint. All eyes are now on the upcoming U.S. Personal Consumption Expenditures (PCE) data, a key inflation metric for the Federal Reserve, which could act as a major catalyst for the market's next directional move.



AI Token Frenzy and Derivatives Market Signals


While major tokens consolidate, the speculative fervor in the market has shifted towards niche sectors like AI-related cryptocurrencies. The recent launch of SAHARA provides a stark case study. The token plunged approximately 40% from a peak of $0.14 to a low near $0.08 on its first day of trading. This price collapse occurred amidst an explosion in trading volume, which surged by as much as 2,700% to between $720 million and $850 million, indicating frenzied retail activity. The derivatives market offers further insights into trader positioning. The annualized three-month basis for BTC futures on major offshore exchanges has climbed back above 5%, signaling a renewed bias for long positions. In contrast, the basis for ETH remains lower. In the altcoin derivatives space, tokens like XLM, BCH, and APT are exhibiting deeply negative perpetual funding rates. This suggests a heavy concentration of short positions, creating the potential for a powerful short squeeze that could drive prices sharply higher if a bullish catalyst emerges.



Looking ahead, traders are navigating a complex landscape. The stability of Bitcoin provides an anchor, but the weakness in altcoins and the impending PCE data release create significant uncertainty. Analysts at Bitfinex suggest the market is in a "wait-and-see" phase, with a dovish PCE result potentially triggering a catch-up rally across the board. However, traders must also be mindful of significant upcoming token unlocks. In the next few weeks, Optimism (OP), Sui (SUI), Ethena (ENA), Aptos (APT), and Starknet (STRK) are all scheduled to release millions of dollars worth of tokens into circulation, which could introduce localized selling pressure. Meanwhile, crypto-related equities show a mixed but generally positive picture. Mining stocks like Core Scientific (CORZ) and the CoinShares Valkyrie Bitcoin Miners ETF (WGMI) posted strong gains, closing up 33% and 10% respectively, indicating investor appetite for exposure to the Bitcoin mining infrastructure. This contrasts with the more subdued performance of MicroStrategy (MSTR), suggesting a nuanced approach from equity investors towards the digital asset sector.

Milk Road

@MilkRoadDaily

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