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Inflation remains sticky, but the Fed is holding steady as markets wait for clearer economic signals. Meanwhile, crypto surged last week, with BTC climbing past $107K and volatility continuing to decline.
Read more for key macro insights, housing data, and what’s driving crypto’s rebound.
USA Week Ahead (ET):
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Tuesday 10a- ISM Manufacturing
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Wednesday 8:15am - ADP Employment report
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Thursday 8:30a - NFP Employment Report
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Friday - July 4th - Markets Closed U.S.A. Holiday
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Disclaimer: Nothing here is trading advice or solicitation. This is for educational purposes only.
Authors have holdings in BTC, ETH, and Derive and may change their holdings anytime.
MACRO Weekly Overview
Last week we had the PCE number released. The headline number showed +2.3% inflation growth y/y (the Fed targets +2.0%), yet a lot of the lower inflation is due to oil prices coming down.
Looking at CORE PCE (excluding energy and food) the inflation rate was +2.7% y/y.
Chart: PCE Inflation Numbers
The next FOMC meeting is July 30th, but a rate cut so soon is unlikely. The CME FedWatch Tool is only pricing in an 18% rate cut probability.
CME FedWatch Tool
Jerome Powell testified to Congress last week, saying that he continues to expect inflationary pressure from the tariffs/trade war. He said, he expects the June and July economic data to start to pick-up the impact.
This means the Fed is likely going to remain in “wait and see” mode while more information around jobs and inflationary pressure becomes available.
Trump on the other hand wants to see rates being cut much earlier. Trump is now floating the idea of announcing his pick for the next Fed Chair as early as this summer. Although Powell will be Fed Chair until May 2026, this early announcement would impact investor expectations, knowing that a more dovish Fed would replace Powell.
Higher rates are impacting purchases of “big ticket” items such as homes, cars and durables.
Last week’s home sales data came in weaker than expected.
New home sales for May were 623k, below the 6-month average of 671k (including seasonal adjustments). The median forecast for May was 695k.
Existing home sales did okay, beating the median forecast. The number was 4.03m for May vs 3.95m expected. That said, this was the weakest release for the month of May since 2009.
Chart: S&P Case Shiller Index
As for home prices, the S&P Case-Shiller index showed a +3.4% annualized growth. This was below expectation of +4.0%, although cheaper homes is good for lower inflation as well.
Next week we have the NFP Employment situation report. Last month’s report was pretty good and had a slight upside surprise, despite a dismal ADP report.
ADP expectations for May were +110k-+130k but came in with only +37k. So we’ll see how the report performs this week.
This weeks release will come Thursday (instead of the usual Friday release) due to markets being closed for the 4th of July.
BTC: $107,606 (+8.0% / 7-day)
ETH :$2,440 (+11.2% / 7-day)
SOL :$151.11 (+16.3% / 7-day)
Crypto Options Overview
The week opened up with the US Strike on Iran. This sent the markets lower on Sunday. BTC briefly broke below the $100k level, but easily rebounded. Ending the week +8% at $107,500.
Chart: BTC Spot (finviz.com)
We can look at crude oil (WTI) futures as a gauge for market sentiment around the US strike on Iran… The market quickly discounted the persistent/expanding war risks right away, sending crude down from $78 → $64, S&P also rallied on the week.
This helped rebound crypto across the board. SOL rallied most on the week +16%, followed by ETH +11 and finally BTC +8%. High beta, risk-on crypto outperformed.
Despite the action last week, measuring the YTD performance across major currencies, we can see BTC has been the steady performer. +15% YTD while both ETH and SOL are down over -20% YTD.
Another important divergence to note last week… BTC managed to rally +8% while Gold broke lower -3%.
Chart: YTD Crypto Returns (pro.amberdata.io)
This strong BTC performance in 2025 has been accompanied by lower volatility and falling Basis YTD.
We can see the futures basis is near 2-year lows for BTC, despite BTC prices being right around ATH’s. We can also see that the futures open interest is near ATH’s as well (yes, this is in part due to prices rallying bringing notional OI up but that’s still a lot of notional dollars allocated to BTC, so imo it does matter).
Chart: BTC Futures + Perps USD OI (pro.amberdata.io)
Right alongside the dropping futures basis, the options volatility has also steadily dropped lower YTD.
Chart: Deribit DVOL Index (pro.amberdata.io)
A couple quick thoughts…
Basis
- As volatility drops, the APR of the futures basis SHOULD be falling lower too… The fixed cost of holding leverage (basis APR) does have a relationship to asset volatility!
- For example: Who would pay 35% APR futures basis… if the asset volatility was only 9%… Basis payers could never “out-earn” leverage costs.
- Vice versa… if the volatility of the asset is 200%, 35% annualized basis costs is only a small portion of the potential reward.
Volatility
- The volatility profile for BTC last week was “risk-off”.
Chart: BTC term structure week-over-week (pro.amberdata.io)
- BTC vol. spiked higher on risk-off headlines around US/Iran. As BTC tested $100k short-dated volatility rallied to 47% IV.
- As markets recovered, volatility dropped from 47% → 32%.
This type of action reminds me of traditional equity volatility.
A grind higher in prices as volatility steadily drops. This is constructive in terms of strong long-term bull markets.
As inflows continue into IBIT and traditional investors partake in BTC exposures. I’d expect this to continue.
Chart: BTC RR-Skew (pro.amberdata.io)
If institutional flows are indeed responsible for the BTC volatility trends we just described, then I believe the next impact from traditional flows will affect the risk-reversal skew.
Covered call selling flows + protective put buying will put pressue on the RR-Skew to go negative.
That said, the wild card for upside remains potential sovereign buyers of BTC.
Chart: Circle (CRCL) Term Structure 6/23 → 6/27 (pro.amberdata.io)
I still love the cash-secured put selling strategy with CRCL stock. The stock hit a high of $298 on Monday with 205% implied volatility for 10-day options.
Throughout the week, CRCL prices dropped and closed the week at $180 with 142% IV for 10-day options.
This makes selling the cash-secured put “forgiving” as the long delta position is naturally hedged by the short vega.
Chart: TastyLive (click to watch)
Ryan Grace and Greg speak more about this strategy on Wednesday’s 6/25 TastyLive show.
Paradigm Top Trades this Week
Weekly BTC Cumulative Taker Flow
ETH Cumulative Taker Flow
BTC Cumulative OI
ETH Cumulative OI
BTC
ETH
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AMBERDATA DISCLAIMER: The information provided in this research is for educational purposes only and is not investment or financial advice. Please do your own research before making any investment decisions. None of the information in this report constitutes, or should be relied on as a suggestion, offer, or other solicitation to engage in, or refrain from engaging, in any purchase, sale, or any other investment-related activity. Cryptocurrency investments are volatile and high risk in nature. Don't invest more than what you can afford to lose.
