The Federal Reserve (FED) "dove" sounds arise, the White House report clarifies: Where is the breakthrough point for the Bitcoin and Ethereum bull run?

Under the intertwining of macro policy games and expectations for regulatory policy implementation, the crypto market remains in a consolidation phase. Bitcoin (BTC) and Ether are hovering around key ranges, with investors closely monitoring whether the Federal Reserve's movements and White House policies can bring breakthroughs to the market. Recently, there have been divergences within the Federal Reserve regarding the pace of interest rate cuts; at this month's FOMC meeting, two voting members publicly supported a 25 basis point cut. At the same time, the White House released a 163-page cryptocurrency policy report that clearly supports stablecoin legislation, promotes DeFi regulatory frameworks, and strengthens on-chain transparency. Currently, Bitcoin (BTC) has been hovering around $118,000 for several days, while Ethereum (ETH) has been oscillating between $3,600 and $3,800, as investors await clearer catalytic signals: will it be the Federal Reserve's monetary shift that lands first, or will clarified regulations reshape a new round of capital allocation?

1. Inflation Eases and Dovish Dissent Emerges: Increasing Discrepancies Within The Federal Reserve on Interest Rate Cuts

Recently, US inflation data has shown signs of mild retreat; however, monetary policy remains under high pressure. According to data released by the US Department of Labor, the Consumer Price Index (CPI) in June rose by 0.3% compared to the previous quarter, with the year-on-year inflation rate increasing to 2.7%. The core CPI (excluding food and energy) year-on-year rate is 2.9%. The core PCE indicator, which the Federal Reserve is focused on, also maintains a growth rate of around 2.7%.

Against this backdrop, the U.S. job market has also signaled a "slowing but stable" situation. According to the June non-farm payroll data, the U.S. added 147,000 jobs, slightly above market expectations, while the unemployment rate fell slightly to 4.1%. However, the number of job vacancies has declined for two consecutive months, and the labor participation rate has dropped to a near-term low of 62.3%, indicating that companies' willingness to recruit is weakening. In terms of wages, the average hourly wage growth has slowed to 3.7% compared to the same period last year, easing wage pressures and opening up policy space for the Federal Reserve's interest rate cut expectations.

As inflation and employment data gradually release signals of economic cooling, internal divergences within the Federal Reserve regarding future interest rate policy have begun to emerge. The FOMC meeting on July 30 decided to maintain the federal funds rate at 4.25% to 4.5%, continuing a record of five consecutive unchanged rates, but there was a rare "double dissent" where two governors appointed by Trump, Christopher Waller and Michelle Bowman, voted in favor of a 25 basis point rate cut. Waller further publicly stated that due to the slowdown in economic growth and inflation being mostly a result of tariff transmission effects, he believes the current policy is too tight and that a rate cut should be implemented in a timely manner to support expansion and employment.

Despite the increasing calls from individual committee members, Federal Reserve Chair Jerome Powell emphasized that the policy will continue to be "data-driven" and did not commit to an immediate rate cut. He pointed out that more inflation and labor market data are needed to confirm trends before making decisions. Overall, while market expectations for a rate cut within the year have increased, there remains significant uncertainty about substantial easing in the short term, given the currently relatively moderate inflation and consistently strong employment.

2. Interpretation of the White House's Cryptocurrency Policy Report: Bitcoin Reserve Plan Remains a Concern

Against the backdrop of heightened attention in the crypto market, the U.S. White House released a 163-page report on cryptocurrency policy on Wednesday (July 30), covering several key areas including stablecoins, Decentralized Finance, tax compliance, and on-chain transparency.

The report systematically summarizes the current U.S. government's regulatory approach and policy framework for digital assets, supports the legislative process of the "GENIUS Act" regarding stablecoin regulation, and clearly proposes to promote the implementation of innovative financial products through regulatory sandboxes and pilot mechanisms. At the same time, it suggests relaxing capital gains tax restrictions on small transactions and optimizing the tax treatment of staking income in terms of tax policy.

However, the "strategic Bitcoin reserve" plan that the market had previously focused on did not provide substantial details in the report, only being mentioned in principle. Specific arrangements regarding the timeline, position size, execution mechanism, etc. were not clearly described, and this vague handling has led to disappointment among some investors.

From the feedback of the market, large trading platforms and compliance institutions generally gave a positive evaluation of the report's content, believing it signals the U.S. government's promotion of the institutional development of the crypto industry. Especially after the regulatory boundaries for stablecoins gradually become clear, it is expected to guide more traditional financial institutions to participate in the digital asset ecosystem. However, there are also voices of concern that the report's "strategic content" is higher than its "execution capability," and many provisions still rely on subsequent legislation and supporting rules to be implemented. The market will still face friction between policy expectations and the actual pace of advancement in the short term.

3. The consolidation phase of the crypto market continues, and the breakout window awaits confirmation

As of July 31, Bitcoin (BTC) and Ether (ETH) prices continue to fluctuate within a range, with a strong prevailing sentiment of market observation.

Coinpedia analyst Shrishesh Tanksalkar pointed out that BTC is supported around 1,171.76 million dollars. If it breaks through the resistance level of 1.23680 million dollars, it may usher in new upward momentum. However, if it falls below the support level of 1.11964 million dollars, it may face further downside risks.

ETH performed strongly in July, with prices rising over 50%, marking the best monthly performance since July 2022. However, it faces significant resistance in the $3,800 to $4,000 range. The market generally believes that if The Federal Reserve (FED) Chairman Powell releases dovish signals, ETH is expected to break through the liquidity area above $4,000, leading to a "buying spree". Analyst Emir Abyazov also pointed out that institutional capital inflows provide strong support for ETH, although it may be affected by the strength of the dollar and macroeconomic uncertainties in the short term.

In terms of altcoins, since late July, altcoins have entered a phase of differentiation and have not yet formed a comprehensive outbreak. According to Coin World, the altcoin market is currently stable near a long-term demand zone, and analysts believe this may be a structural adjustment phase for a future bull market. Meanwhile, the Altcoin Season Index has dropped from a high of 55 to 38, indicating that about 38% of the top 100 altcoins are still outperforming Bitcoin, and the bull industry has not yet widely activated.

However, Seeking Alpha warns that the rise of ETH may not necessarily translate to the altcoin sector. The TokenMetrics team also pointed out that the capital flow has not significantly improved, and altcoin prices are still more than 90% lower than their previous highs. Without large-scale capital injection and clear fundamental support, the rebound in the sector may be slow.

Conclusion:

Despite the emergence of dovish voices within The Federal Reserve (FED), along with the White House's latest encryption policy report outlining a preliminary regulatory blueprint for the industry, the market has not rapidly strengthened as a result. Mainstream coins like BTC and ETH are still oscillating within a critical range, and investors remain highly sensitive to the pace of policy implementation and macroeconomic data trends. At the same time, the altcoin market is also in a stage of differentiation, lacking a unified direction. In this environment of ongoing uncertainty, whether the next breakthrough in the crypto market will come from a shift in monetary policy or a clarification of regulatory frameworks remains to be seen with time and market dynamics.