Market Commentary

EMPLOYMENT: A WEAK PRINT REBALANCES THE FED

The indicator we flagged as the first gauge after the Fed's restrictive meeting arrived Friday August 7, and surprised to the downside. Nonfarm payrolls fell by 23,000 in July, their first contraction in months, versus an expectation of +83,000. The decline concentrated in public employment (-53,000) and in retail, leisure and hospitality. The unemployment rate edged down to 4.1%, but for an unconstructive reason: the drop in labor force participation to 61.4%, its lowest in more than five years. Wage growth moderated to 3.2% year-over-year, the lowest since 2021.

The implication for Digital Assets is direct and opposite to the prior week's. After an FOMC in which three members called for hikes, the jobs data introduces the other side of the Fed's dual mandate: it can no longer focus solely on inflation but must weigh the deterioration in the labor market. That reduces the probability of a hike and reopens the expectation of a prolonged pause, a more favorable environment for risk assets. It was this shift in expectations, together with institutional flows, that drove the price recovery into the week's close.

CRUDE: STABILIZATION AT LOWER LEVELS

The energy front continued to decompress. Brent traded around USD 82–85 during the week, consolidating the reversal from the USD 100 it had reached two weeks earlier. Pockets of geopolitical tension persist around the Strait of Hormuz, but without the intensity that had spiked prices. For investors, the relevance is that energy-driven inflationary pressure — the factor that contained the market in mid-July — remains contained, reinforcing the effect of the jobs data on monetary policy expectations.

REGULATION: THE CLARITY ACT FALLS SHORT OF A VOTE BEFORE THE RECESS

The CLARITY Act outcome, which we had been tracking week to week, was the one recent signals anticipated: the Senate failed to vote on the market-structure bill before beginning its summer recess. Disagreements between the two parties — chiefly around the enforcement mechanism of the ethics provision — prevented assembling the necessary votes. The bill is not off the table; expectations shift to September, when the Senate resumes on the 14th with a narrow window to advance it.

For Digital Assets, it is a postponement rather than a rejection. The market did not react adversely, suggesting the delay was largely priced in. Nonetheless, it keeps open the regulatory risk premium that an approved framework would have helped reduce, and carries that uncertainty into the final stretch of the year.

Bitcoin (BTC): Trades around USD 64,930 (+3.2%), recovering the ground ceded the prior week. The advance accelerated Friday after the jobs data, with price reaching a high near USD 65,300. The quality of the move is notable: it rested on large institutional inflows rather than leverage, suggesting a firmer base than a speculative bounce. The USD 65,000 level is again the immediate reference; clearing it on volume would be the signal of continuity. Support at USD 62,000–63,000; resistance at USD 65,000–66,000.

Ethereum (ETH): Trades around USD 1,915 (+3.0%), defending the USD 1,900–1,925 zone with institutional backing recovered after the prior week's cooling. ETF flows turned solid again, with accumulation concentrated once more in BlackRock. It remains 44% below its level of a year ago, but the USD 2,000 zone reappears as a target if flow holds. Support at USD 1,850–1,880; resistance at USD 1,950–2,000.

Solana (SOL): Trades around USD 73.50 (+0.7%), stabilizing after four weeks of decline, though with the weakest relative performance of the three assets. SOL ETFs saw essentially no flow on the week, failing to accompany the BTC and ETH recovery. Consolidation above USD 72 is constructive, but the asset still awaits its own catalyst. Support at USD 71–72; resistance at USD 75–77.

The derivatives structure accompanied the recovery without signs of overheating. The most relevant aspect is the nature of the advance: it was driven by institutional spot buying — visible in the magnitude of ETF flows — more than by speculative leverage. That composition is what distinguishes a sustainable move from a fragile bounce, and reduces the risk of an abrupt reversal from forced liquidations.

It is worth contrasting positioning with the prior week's. July's close had shown a defensive bias, with strong demand for coverage below USD 60,000 in the options market. This week's recovery, supported by the shift in Fed expectations, tests that defensive positioning: part of the caution with which the market entered August looked, by the week's close, excessive against the strength of the flows. Funding rates held at moderate levels, consistent with an orderly rather than euphoric advance.

Expected volatility for the week ahead: moderate to high. The July inflation print (CPI), due in mid-August, will be the next major determinant: with the labor market showing weakness, contained inflation would reinforce the expectation of a Fed on hold. Added to that is August's lower seasonal liquidity, which can amplify moves in both directions.

BTC: +USD 763.60MM, the strongest week of the recent period and a decisive turn from the mixed behavior of prior weeks. Four consecutive sessions of solid inflows — Mon +170.10, Tue +211.50, Wed +244.40, Thu +137.60 — with BlackRock leading each one (IBIT contributed between USD 111 and 197MM per session). The magnitude and consistency are the week's most constructive signal: institutional demand not only returned after the pre-Fed caution but intensified with the shift in monetary expectations. It is flow that supports the thesis of a structural buying base being rebuilt.

ETH: +USD 194.10MM, recovering the consistency that had cooled the prior week. After a minor outflow Monday (-11.90), flow turned solid Tuesday through Thursday (+53.10, +60.80, +92.10), again channeled disproportionately through BlackRock's ETHA. The rebound reactivates the relative-allocation signal in favor of ETH that we had been highlighting, interrupted only briefly the prior week.

SOL: -USD 0.90MM, essentially no flow all week. Unlike BTC and ETH, SOL did not participate in the return of institutional demand. The absence of flow, more than outflows, confirms that institutional interest in SOL through the ETF channel remains intermittent and dependent on specific catalysts.