The cryptocurrency market continues its upward trajectory, albeit with increasing signs of exhaustion and short-term hesitation. Over the past week, crypto market capitalisation maintained a respectable 1.8% growth, despite a mild 0.6% decline in the last 24 hours, leaving the total market cap at $3.35 trillion. 

This intraday softness underscores the persistent buyer indecision at elevated levels, even as every dip is met with fresh demand. The divergence from the 200-day moving average suggests ongoing bullish sentiment, but caution is growing as momentum indicators begin to flatten. The Gradiopexo team brings expert knowledge and practical insights to this topic in their detailed overview.

Bitcoin Tests Support After High-Level Rejection

Bitcoin (BTC) remains the bellwether of the digital asset market, and its recent price behavior exemplifies broader trends. Currently trading around $108,500, Bitcoin attempted to pierce through the $110,000 resistance level last week, only to encounter intense selling pressure. 

This rejection pushed the price back toward the crucial 50-day moving average (MA), a medium-term technical support line that many institutional traders and quant-based funds closely monitor.

Despite the pullback, buyers stepped in near the 50-day MA, reaffirming the area as a strong accumulation zone. However, the repeated failure to sustain gains above $110K signals that bulls are facing psychological and technical resistance, and market fatigue is beginning to show. This dynamic reflects a nervous and reactive market, where short-term liquidity is drying up just as medium-term confidence tries to hold ground.

Market Liquidity and Capital Flows: Mixed Signals

Fresh data from CoinShares reveals a notable deceleration in global crypto fund inflows, which fell by 2.5 times last week to $1.042 billion. While this slowdown may alarm short-term traders, it’s important to distinguish the composition of these flows. Bitcoin still attracted $790 million in investments, suggesting that macro confidence in BTC as a store of value remains strong. 

Meanwhile, other altcoins like Ethereum (ETH) and Solana (SOL) attracted $226 million and $22 million, respectively, indicating selective appetite for Layer 1 assets.

Even more telling is the 12th consecutive week of inflows into cryptocurrency ETFs, pushing assets under management (AUM) to an all-time high of $188 billion. This trend reflects long-term institutional interest, albeit with growing caution. As Bitcoin approaches its historical price ceiling, ETF inflows have moderated, hinting that investors are hedging exposure rather than increasing outright risk.

Declining Volatility and On-Chain Activity

Despite strong headline figures, on-chain metrics are painting a different picture. According to The Block, both Bitcoin’s on-chain activity and its implied volatility have fallen to their lowest levels in nearly two years. This divergence, low volatility amid high prices, is atypical and suggests that traders are parking capital, waiting for a clearer breakout or reversal signal.

Glassnode’s latest market intelligence highlights a potential ‘summer lull’ in crypto trading. Spot volumes across major exchanges have hit 12-month lows, and daily turnover continues to decline. While this may appear benign, it poses a liquidity risk if sentiment shifts rapidly, as thin order books can exacerbate volatility during sudden sell-offs.

At the same time, a sharp increase in the unrealized value held by long-term Bitcoin holders could act as a double-edged sword. On one hand, it reinforces a HODL mindset, but on the other, it amplifies capitulation risk if the price begins to falter. 

This setup warrants close monitoring of dormant wallet movements, miner reserves, and exchange inflows, all of which can act as early warning signals.

Regulatory Headwinds and Miscommunication

Outside market metrics, regulatory developments continue to influence sentiment. Recent headlines suggested that UAE authorities were offering ‘golden visas’ to cryptocurrency investors through a partnership with the TON Foundation. However, these reports were swiftly denied by UAE officials, throwing cold water on the notion of crypto-based migration incentives.

The proposed plan would have allowed investors to secure a 10-year UAE residency visa by committing $100,000 in Toncoin (TON) and paying an additional $35,000 in fees. The backlash from regulators underscores the uncertain policy environment crypto investors face, especially when migrating capital across jurisdictions. 

It also reflects the tension between private initiatives and governmental oversight in emerging blockchain economies.

Conclusion: The Market Climbs, But with Caution

In sum, the crypto market is showing resilience, with key metrics like capital inflows, price support levels, and ETF growth all pointing to ongoing bullish sentiment. However, the backdrop is far from euphoric. The repeated failure to break $110K, declining on-chain activity, and muted volatility all hint at a market that is grinding upwards, not surging.

Investors and traders should view this phase as one of consolidation, not capitulation. The increasing gap between price performance and fundamental activity could resolve in either direction, depending on external catalysts, such as macroeconomic data, regulatory announcements, or a surge in trading volumes.