After three months of pressure, crypto found its footing in July. Total market cap climbed 8%, with bitcoin holding the $58,000-$60,000 support zone throughout the month, closing up ~8%, its best return since April 2025. Two variables now dominate the second-half outlook: the CLARITY Act, facing an August 7 Senate deadline ahead of the recess, and the September Fed decision.

While no bottom can be called with certainty, a few structural trends point toward the beginning of a prolonged consolidation following an uptrend.

ETF FLOWS: POSITIVE FOR THE FIRST TIME SINCE APRIL

Bitcoin ETF flows turned positive for the first time since April, with $403 million in net inflows in July. That aligns with the $58,000 support level we flagged in last month’s issue, which held as buyers defended it with substantial order book support.

Ethereum ETFs had an even stronger month relative to their market cap, pulling in $359 million in net inflows, outpacing bitcoin’s ETF flows of the month at approximately $403 million by almost 300% on a market cap-adjusted basis. On returns, Ethereum also outpaced bitcoin by nearly 2.5x in July, up 19% against bitcoin’s 8%.

WHAT TO EXPECT

Blue-chip tokens such as ETH and SOL are beginning to show relative strength, and the next few weeks could be decisive. Bitcoin is knocking on a key resistance level, $66,000, which it hasn’t broken in 50 days. Two catalysts dominate the August outlook: the CLARITY Act faces a Senate deadline on August 7, and the September Fed meeting looms large. The question is whether improving fundamentals and positive ETF flows will finally push crypto through its key resistance levels. Continue reading to find out the two catalysts we’re closely monitoring and our base and bear case scenarios.

21SHARES IN THE NEWS

The hype around Hyperliquid

Global Head of Research Eliézer Ndinga explained to the audience at the Hyperliquid Summit what’s driving institutional demand around the decentralized derivatives exchange.

Fed rate hike fears

21shares’ Head of Macro Stephen Coltman shared his analysis with Barron’s on potential interest rate hikes and the expected impact on risk assets.

UK’s new chancellor

Our CEO Russell Barlow told Financial News that delivering the UK’s cryptoasset regime on schedule by October 2027 is the single most important task facing Chancellor John Healey, and the key to keeping the UK competitive as a global digital asset hub.

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Research Newsletter

Each month the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

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