The headlines still look bad. The data is changing.
Good morning. Crypto generated thousands of headlines this week. Only a handful are worth your attention.
Market Compass
1. Institutions Are Dipping Their Toes Back In
What happened
After weeks of relentless selling, Bitcoin and Ethereum ETFs finally posted several days of net inflows. It isn’t a flood of money, but it’s a noticeable change in direction.
Why it matters
Markets don’t usually flip from panic to euphoria overnight. Recoveries often begin quietly, while most people are still convinced the worst is ahead.
What I think
I wouldn’t call this the start of a new bull market. But after weeks of nothing but bad news, it’s refreshing to see institutions buying again instead of simply selling.
2. Stablecoins Are Telling Two Different Stories
What happened
The total stablecoin supply has fallen since May. At the same time, transaction volumes have reached new highs, while Circle continues issuing large amounts of USDC on Solana.
Why it matters
At first glance, those facts seem contradictory.
They’re not.
What I think
The market isn’t running out of dollars. It’s using them differently.
Fewer dollars sitting idle. More dollars actually moving.
That’s a much more interesting story than the headline “Stablecoin supply is down.”
3. Leverage Keeps Getting Punished
What happened
The past week brought another wave of liquidations, wiping out traders who had become a little too confident on the long side.
Why it matters
Bull markets don’t climb in a straight line. Excess leverage has to disappear from time to time, otherwise every pullback risks becoming a crash.
What I think
I don’t enjoy seeing liquidations.
But I do like cleaner markets.
Sometimes the healthiest thing that can happen is forcing impatient money to leave.
One Thing I’ve Been Thinking About
I expected stablecoins to tell me whether crypto was getting stronger.
Instead, they told me where crypto is changing.
For weeks we’ve heard the same headline:
“Stablecoin supply is shrinking.”
That sounds bearish.
Maybe it is.
But then I noticed something else.
Transaction volumes are making new records.
Circle keeps issuing more USDC on Solana.
New regulated products continue attracting capital.
Suddenly the story feels different.
It reminded me that investors often confuse size with activity.
A city isn’t healthy because people leave money sitting in their bank accounts.
It’s healthy because money changes hands.
Crypto works the same way.
A shrinking stablecoin supply isn’t automatically a warning sign if the remaining dollars are working harder than before.
Maybe capital isn’t leaving crypto.
Maybe it’s simply becoming more selective.
That’s a much healthier market than one where everything rises together.
Every cycle starts with everyone buying almost anything.
It ends with investors becoming selective again.
Oddly enough, that’s usually a sign of progress.
The easiest mistake in investing is assuming the market has only two gears:
Bullish.
Or bearish.
Reality is messier than that.
Sometimes the most important change isn’t whether money is entering or leaving.
It’s where it’s choosing to go.
That’s the trend I’ll be watching over the next few weeks.
Technical Corner
Bitcoin (BTC)
Trend: 🟥 Bearish Momentum: 🟡 Improving
Support: $60k Resistance: $65k
Bitcoin is stabilising after a volatile week, but it hasn’t broken out yet.
The longer-term trend still needs more evidence before turning positive, so patience remains the higher-probability trade.
That’s all for today.
Go touch some grass.
Bitcoin can survive a few hours without you.
—
Lucas @ MoonLetter Research