This week, Bitcoin staged a powerful comeback, approaching the $80,000 mark and flipping market sentiment from deep pessimism to cautious optimism. While Ethereum and most altcoins continued to slide, the S&P 500 and Russell 2000 hit fresh all-time highs, signaling a broad risk-on recovery. The U.S. Dollar Index hovered near 98.8, still well below the psychological 100 level.
Technicals and Institutional Views Support the Rally
CryptoQuant CEO Ki Young Ju noted that Bitcoin has never broken a prior low after a 30% rebound, and the current 30% bounce level at $79,694 provides a clear floor for traders. Perpetual funding rates have turned deeply negative, historically a bottoming signal rather than the start of a crash. “Bitcoin tends to be close to the bottom when it looks least attractive,” said Ki Young Ju. Meanwhile, Peter Brandt argued the bottom may not come until September or October, but the next bull run could still target $300,000 to $500,000. Tom Lee warned that Federal Reserve chair transitions often precede corrections, but also set the stage for “unprecedented rallies” afterward.
DeFi Security Crisis and the Privacy Debate
Despite Bitcoin’s resurgence, DeFi suffered repeated blows. North Korean Lazarus Group attacked KelpDAO, executing 1,610 transactions in 11 hours. Aave froze affected markets, and Arbitrum reportedly recovered tens of millions. More alarmingly, THORChain became a conduit for hackers—attackers from both KelpDAO and Balancer moved nearly 75,700 ETH (~$175 million) into Bitcoin in just 1.5 days. Pentoshi declared “the DeFi dream is effectively over,” arguing users can get similar yields from traditional brokers without the security risks. Mert Mumtaz hinted certain privacy projects now seem more relevant than ever.
Stablecoins: Record Issuance and Freeze
Tether made headlines on both fronts: it newly minted $3 billion USDT in a week while also executing what appears to be its largest-ever USDT freeze. This highlights the tension between Bitcoin’s appeal for neutrality and stablecoins’ advantages in usability and regulatory alignment.
Other Highlights
Morgan Stanley Investment Management launched a stablecoin reserve fund, following its Bitcoin ETF debut. The CFTC charged a U.S. military member with insider trading on a Polymarket event linked to Venezuela’s president, netting $404,000. President Trump commented, “Unfortunately, the whole world has become a casino.” Also, SBF’s FTX estate may have sold his investment portfolio near the bottom; now its hypothetical value is $114 billion, adding to the hindsight-driven bull narrative.