The Weekly Wrap: Short-Lived Rally After U.S. Inflation Data, USDT Dominance at Multi-Year Highs & More

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This Week’s Top Stories

“U.S. inflation rate fell to 3.5 percent in June, marking the largest decline since 2020.” Tuesday, 14 July 2026 

• The annual inflation rate fell to 3.5 percent in June 2026, its first decline in five months, down from 4.2 percent in May and below the forecast of 3.8 percent, largely because the ceasefire between the U.S. and Iran caused energy prices to fall sharply.
• The 0.4 percent monthly decline in June 2026 was the largest in more than six years. Once again, it was almost entirely driven by the energy component reversing after the Iran conflict premium came out of oil prices.
• However, inflation risks could reignite in the coming months amid renewed hostilities between the U.S. and Iran this week and oil prices rising above $80 again.
• Treasury yields fell on Wednesday as traders weighed the milder than expected inflation report.
• The new Fed Chair, Warsh, mentioned that the Fed’s war against inflation is by no means over, but that there is good news from the front. He added that the probability of Fed rate hikes should continue to decline as inflation at the factory level trends lower.

“Binance records $1.8 billion in USDC outflows, likely due to its failure to secure a MiCA license.” This week 

• Since 1 July 2026, MiCA has required companies to hold an EU license to serve clients in the European Economic Area. Two large exchanges were affected by this new regulation. Binance has not yet obtained a license and had to suspend its EU services, with only withdrawals remaining available. Bybit is licensed, but its EU platform offers far fewer products than its global platform.
• Binance’s CEO stated that around 70 percent of the funds withdrawn from Binance by EU users were transferred to self-custody wallets, while only 30 percent were moved to regulated platforms compliant with MiCA.
• Binance recorded $1.8 billion in net USDC outflows in Q2 2026, including $1.4 billion in June alone, while its tracked USDC balance fell by 19 percent.

“Iran and the U.S. step up attacks, the Strait of Hormuz closes again and oil spikes above $80.” This week 

• Iran and the United States exchanged intensified fire during a week of escalation that has called last month’s truce into question. For the first time since a memorandum of understanding paused the fighting last month, the United States launched two major waves of air strikes in a single day on Wednesday.
• The week of increasingly intense fighting has tested the limits of escalation that both sides established during four months of conflict before last month’s truce. The renewed escalation has once again largely halted traffic through the Strait of Hormuz.
• Brent crude climbed above $85 per barrel, representing an increase of roughly 11 percent, and is currently trading at around $80 at the time of writing.

Short-Lived Rally after the CPI-Data Release 

The crypto market started the week on a negative note, with most major crypto assets trading lower into Monday. However, the surprisingly soft CPI data release, which showed the largest month over month decrease in inflation since 2020, managed to ignite a rally on Tuesday, with Bitcoin briefly trading above $65K and Ethereum touching $1’950. The positive momentum was short lived, however, with most crypto assets losing strength on Wednesday and Thursday. 

The U.S. stock indices also lost some ground over the past two days, while oil prices held steady around the $80 per barrel mark this week. The U.S. Dollar Index did not react much to the inflation data on Tuesday and remains above the 100 level, while gold continues to trade around the $4’000 mark. It has not been able to show much strength at the current support zone, which dates back to October last year. 

Looking at individual crypto assets, ETH, ZEC, ONDO and PUMP are still up on the week, while HYPE, TAO, LIT and SOL are among the projects with the largest downside moves. 

It is interesting to note that the market did not manage to sustain the positive momentum from the soft inflation data release. This shows that most participants continue to expect either further downside or boring sideways price action over the summer.

USDT Dominance With Multi-Year High in June 

USDT dominance reached its highest level in several years at the end of June, surpassing the recent high from February this year. Tether dominance has been on a steady upward trend since forming a double bottom in August last year at around the 4 percent level. The record high for USDT dominance still dates back to June 2022, at around 9.5 percent, and it remains to be seen how it trades over the coming weeks and months. A consolidation around the current levels would likely be viewed as bearish for the crypto market, as high USDT dominance shows that traders are increasingly positioned in stablecoins and that appetite for other, more volatile crypto assets is low. 

Most historical Bitcoin bottoms have been accompanied by a sharp spike and wick in USDT dominance, so this chart could be helpful in the future. It is worth keeping an eye on it for confluence when trying to time a bottom for crypto assets.

Hyperliquid with Yearly High, DTCC Tokenization News & More 

In the onchain world, Hyperliquid is making waves again this week as traders have become excited about the upcoming CXMT IPO, one of the largest Chinese IPOs in history. CXMT is Trade.xyz’s fourth pre IPO market and its first tied to a Chinese company, following earlier perpetual futures linked to SpaceX, Cerebras Systems and Quantinuum. 

Hyperliquid’s total open interest reached approximately $11.07 billion on July 13, its highest level of 2026, before easing to about $10.88 billion. HIP 3 markets contributed roughly $3.69 billion, with RWA open interest hitting a new all time high. HIP 3’s share of total Hyperliquid perpetual futures volume has climbed from roughly 2 percent at the start of the year to around 50 percent today. 

In other news, the DTCC launched a securities tokenization pilot with nearly 40 financial firms and technology providers to test the tokenization of stocks and U.S. Treasuries. The assets involved include Microsoft, Circle, QQQ, SPY, short term Treasury ETFs and Treasuries of various maturities. Participants include BlackRock, JPMorgan, Goldman Sachs, Vanguard and the NYSE. The DTCC plans to formally launch its tokenization service in October this year. 

As we have repeatedly mentioned, perpetual futures DEXs have been the hot topic in recent months. This week, Jito launched JTX, its self-custodial trading platform, initially offering spot assets and equities, with perpetual futures arriving later this year. Jito also proposed JIP-38 this week, which intends to establish Jito as a token centric network, following in the footsteps of protocols such as Hyperliquid. The proposal seeks to commit 100 percent of the Jito DAO’s share of revenue from JTX to programmatic buybacks and burns of JTO for at least one year following the launch of JTX.

ETF Flows, Strategy BTC Balance Unchanged & Morgan Stanley Launches Crypto Trading 

This week, ETF flows were mixed. Bitcoin started with a rather large outflow on Monday, with $424 million leaving the products. Ethereum and Hyperliquid also saw small outflows on the first trading day of the week. However, flows started to recover overall, and Bitcoin attracted roughly $300 million on Tuesday and Wednesday as investor sentiment recovered significantly following the lower than expected U.S. inflation print on Tuesday. Thursday also brought roughly $80 million in inflows for the BTC spot ETFs, while Ethereum saw $30 million in outflows. 

Last week, the major crypto spot ETFs finally posted their first week of positive flows after two months of relentless selling pressure. Global crypto investment products attracted $281.8 million in net inflows last week, ending an eight-week stretch of outflows that erased more than $7 billion from the sector. 

There was also an interesting development regarding Strategy and Michael Saylor, as the company announced in an SEC filing that it had sold almost 5 million MSTR shares for almost $470 million last week. The company made no Bitcoin purchases during the week, leaving its holdings unchanged at 843’775 BTC, while its USD reserve rose to $3 billion. 

Strategy’s decision to sell its MSTR common stock without purchasing any additional Bitcoin can be interpreted as evidence that the company is following through on its recently unveiled Digital Credit Capital Framework. The $3 billion cash reserve extends the company’s coverage of its annual dividend obligations to more than 20 months and should help quell investor concerns about Strategy’s ability to service its stack of preferred securities and convertible debt without needing to tap capital markets. 

BitMine, on the other hand, is unfazed and purchased an additional 27’801 ETH over the past week, lifting its total holdings to 5.77 million ETH, or about 4.8 percent of Ethereum’s supply. As of this week, the company also held $482 million in cash and marketable securities, with its total crypto, cash and other investments valued at more than $11 billion. 

In other news, Morgan Stanley has launched spot cryptocurrency trading on its E*TRADE platform, allowing eligible customers to buy, sell and hold Bitcoin, Ethereum and Solana through a partnership with digital asset infrastructure provider Zero Hash. Additionally, it moved a step closer to launching spot Ethereum and Solana ETFs after filing another amendment with the SEC on Tuesday.

Fearful Crypto and Stock Markets 

Both the crypto and stock markets are currently in fearful territory. Crypto market sentiment has been increasing very slowly since the beginning of the month, when sentiment reached peak fear levels, but it remains in fear territory at 27. The CNN stock market sentiment index has also increased in recent weeks but did not really drop too much over the past month, as its low at the end of June was 25 and the index currently stands at 42. 

Members of the American Association of Individual Investors switched to a bullish stance this week, with almost 45 percent feeling bullish compared with 33 percent taking a bearish position for the coming six months. The U.S. stock indices have already corrected to the downside over the past two days. Since this sentiment survey came out at the beginning of the week, will they already flip bearish again next week?

• Interactive Brokers has added trading support for nine tokens through zerohash: AAVE, APT, CC, LDO, MON, NEAR, XPL, PAXG and UNI. - Link 

• SEC Crypto Task Force meets with Hyperliquid Policy Center and Tradexyz to discuss crypto asset regulations. - Link 

• According to CNBC, Backpack has launched 24/7 trading for select U.S. equities, including SpaceX, Micron and SanDisk, for international investors. – Link  

• The U.S. government transferred nearly 4’000 Bitcoin to Coinbase Prime on July 13. – Link 

• Crypto.com Announces $400 Million Strategic Investment from Citadel Securities. – Link 

• MegaETH sunsets Mega Mafia accelerator program, noting 'most' of its successful apps left. – Link 

• Trump's longtime teleprompter operator accused of using insider knowledge to place bets on Kalshi. – Link

Mixed News Equals Mixed Markets 

While some market participants might argue that crypto showing weakness after such positive inflation data in the U.S. is a concerning signal, others might argue that crypto holding up this week despite the negative news surrounding the conflict between Iran and the U.S. is a positive sign. In the end, we had a mixture of negative and positive news, and the market did exactly what you would expect: it traded up and down without a clear direction or trend. It’s July, many people are on vacation, and August is around the corner. All halving cycle enjoyers continue to eye October for a potential market bottom, which would be rather surprising since so many are currently waiting for the market to bottom by then. But who knows? Maybe it really is that easy. 

Below, you can find some of the key data releases and events to watch out for next week. 

Wednesday, 22 July 2026 

USA – Crude Oil Inventories 

Thursday, 23 July 2026 

Eurozone – ECB Interest Rate Decision & Press Conference 

Friday, 24 July 2026 

Japan – National CPI 

USA – New Home Sales