Latest / The Cryptocurrency Economy with Fexingo: Bitcoin, Ethereum, and Digital Money Markets / Why Bitcoin and Altcoins Are Both Rallying This July
Transcript
- Lucas: So Bitcoin is sitting just above sixty-one and a half thousand dollars this morning, up two and a half percent over the past five days. Nothing explosive, right? But when you look underneath, the altcoin action is actually way more interesting — Solana up nearly eight percent, Cardano up over thirteen percent in the same window. Luna: That's a pretty big divergence from the last few weeks, where Bitcoin was basically holding while everything else slid. So what changed? Lucas: Well, I think the first thing to flag is that the macro environment hasn't really budged. The Fed's effective rate is still at three point six three percent, flat since June. No new signals on cuts, no hawkish surprises. So this rally isn't coming from a macro catalyst — at least not directly. Luna: And if it's not macro, it's probably something structural in the crypto ecosystem itself. Like stablecoin flows or something in derivatives. Lucas: Exactly. And if this show helps you make sense of that kind of shift — walking you through why a specific number matters — then honestly, if today was worth a coffee to you, that's the link: buy me a coffee dot com slash fexingo. Luna: Yeah, listeners keeping us ad-free is how we keep doing this deep-dive stuff. Appreciate it. Lucas: So back to it — let's talk about what's actually moving under the hood. The stablecoin supply has been ticking up for about two weeks now. Total market cap of the top stablecoins is up around one point five percent in the past seven days. That's not huge, but it's a reversal from the steady drip lower we saw through most of June. Luna: So capital is coming back into the ecosystem, not flowing out. That's the kind of signal that typically precedes a broader rally, not just a Bitcoin bounce. Lucas: Right. And when you look at where that stablecoin liquidity is flowing, it's not just sitting in Bitcoin. The trading volumes on Solana and Cardano have picked up noticeably. Solana's daily DEX volume, for instance, is up about twelve percent week-over-week. That's real usage, not just speculation. Luna: Cardano's thirteen percent price move is the outlier though. That's not just stablecoin inflows — that's a specific narrative. Are we seeing something around governance upgrades or DeFi adoption there? Lucas: Yeah, there's been chatter about the upcoming Chang hard fork, which is supposed to introduce on-chain governance. That's a catalyst that's been brewing for a while, and the market seems to be pricing it in early. But here's the thing — Cardano has had these narrative-driven rallies before, and they've faded. So the question is whether this time is different. Luna: And Solana's move feels more structural — it's been bucking the downtrend for a few episodes now, as we've covered. The ecosystem keeps building, institutional interest is real, even if retail hasn't fully returned. Lucas: Exactly. Solana's price action is supported by actual network growth. Total value locked on Solana DeFi is up about eight percent in the past month, even while the broader market was choppy. That's a healthy sign. Luna: So if stablecoins are flowing in, and altcoins with real development are leading the charge, this could be the start of a more sustained risk-on rotation within crypto. Not just a dead cat bounce. Lucas: That's the bull case. But let's look at the counterargument, because there always is one. Bitcoin dominance — Bitcoin's share of total crypto market cap — is still around fifty-two percent. That's not low. Historically, altcoin seasons really get going when Bitcoin dominance drops below forty-five percent. So we're not there yet. Luna: Right. So this could still be a 'rising tide lifts all boats' scenario where Bitcoin is the anchor, and altcoins are just catching up after being oversold. Not necessarily a rotation where capital is leaving Bitcoin for alts. Lucas: Precisely. And the derivatives market tells a similar story. The Bitcoin futures premium — the basis — is still modest. It's not flashing the kind of exuberance you'd see if traders were piling into leveraged long positions across the board. So the rally feels cautious, not euphoric. Luna: That's actually healthy. Euphoric rallies tend to top out quickly. A cautious grind higher with real volumes is more sustainable. Lucas: Agreed. Now, one more thing — and this is where I think the macro story might re-enter the picture. The Fed's rate pause has been fully digested. Markets are now pricing in a potential cut in September, but it's not locked. If we get a weak jobs number or a lower CPI print later this month, that could shift expectations. And if risk assets globally rally, crypto would likely join in. Luna: So the crypto rally right now is partly a global risk-on move, partly crypto-specific flows. The question is which factor dominates if macro turns. Lucas: That's exactly the right question. And my view is that crypto is increasingly sensitive to macro, but not a pure macro asset. When the Fed hints at easing, crypto tends to rally faster than stocks because it's a higher-beta play. But when macro is stable like now, crypto's own narratives — like the Cardano fork or Solana DeFi growth — can drive returns. Luna: So how do you trade or position for this? Or is it more about watching for confirmation? Lucas: I think the smartest approach is to watch Bitcoin dominance. If it starts ticking down from fifty-two percent toward forty-eight percent while total market cap keeps rising, that's a real altcoin season signal. If dominance holds steady or rises, then it's just Bitcoin pulling everything along. Luna: And for now, with Ethereum up six percent but still below two thousand, it's not exactly leading the pack either. It's more of a follow-on. Lucas: Ethereum is actually an interesting case. It's up six percent over five days, but that's less than Solana and Cardano. Its narrative is more about staking and the supply squeeze from the merge and EIP-1559. That's a longer-term structural story, not a short-term momentum play. Luna: So the market is rewarding narratives with near-term catalysts — Cardano's fork, Solana's ecosystem — while Ethereum's steady as she goes approach gets less speculative attention. Lucas: Exactly. And that's actually rational. If you're a trader, you want event-driven alpha. If you're an investor, you want the structural compounder. Both can be right. Luna: One thing I want to circle back to — stablecoin reserves. We mentioned they're growing. But where is that stablecoin supply actually held? Is it on exchanges, ready to be deployed, or in DeFi protocols earning yield? Lucas: Great question. The data shows that exchange-held stablecoin balances have increased about two percent in the past week. That's the 'dry powder' ready to buy. Meanwhile, DeFi deposit rates for stablecoins are still low — around two to three percent — so there's less incentive to lock them up. That suggests a decent amount of capital is sitting on the sidelines waiting for an entry point. Luna: So if we get a breakout above sixty-two thousand on Bitcoin, that dry powder could flood in and push prices higher quickly. Lucas: That's the setup. Sixty-two thousand is a key resistance level — Bitcoin touched it in early June and got rejected. If we break through with volume, the next target is the range around sixty-five to sixty-eight thousand. And if that happens, altcoins could really take off. Luna: What about the downside risks? There's always something — regulatory, hack, macro shock. Lucas: Sure. The biggest near-term risk is probably a surprise hawkish Fed — like a rate hike or a signal that cuts are off the table. That would hit all risk assets. Crypto would get hit hardest. Also, any major exchange hack or regulatory enforcement action could spook the market. But those are hard to predict. Luna: So for the listener trying to figure out what to do — maybe just watch Bitcoin dominance and the sixty-two thousand level. If both break in the right direction, it's go time. Lucas: Exactly. And remember, this is a space where narratives shift fast. Two weeks ago everyone was bearish, now the tone is cautiously optimistic. That's crypto. Luna: Alright, well keep an eye on those levels. And if you want to support the show, you know where to find us. Lucas: Yeah. Until next time, stay curious.