FX168 Financial News Agency (Asia) reported that on Monday, July 21, Bitcoin traded at approximately $118,300, slightly lower than last week’s historical high of $123,000. Ethereum once again outperformed the world’s largest crypto asset, trading at $3,750.15, up 4% in the past 24 hours and 26% over the past week, with funds continuing to flow into high Beta assets.
Bitcoin remained stable around $0.1183 million, consolidating within a narrow range. After strong institutional funding in the early session, there was a sell-off at the end of the day, dropping below the key support of $118,000, suggesting a possible deeper correction.
Ethereum rose 3.78%, with institutional funds continuing to flow in while money exited small altcoins. Analysts warned that rising momentum and $331 million in short bets could trigger short covering, further pushing up the market.
The CoinDesk 20 Index reported at 4,071.75, indicating that investor appetite remains strong. However, new data from CryptoQuant shows that turmoil may be brewing beneath the surface of the market.
On Monday morning, Bitcoin’s market share briefly fell below 60%, the first time since March of this year. This indicator measures Bitcoin’s proportion of the total market cap in the cryptocurrency market, dropping to 59.8% at one point in the early session.
(Source: Coinmarketcap)
This decline reflects enhanced performance of altcoins among major digital assets. Ethereum increased by 4%, while Ripple (XRP) and Solana rose by 2% and 3%, respectively. In the same period, Bitcoin itself fell by 1%.
Market dynamics show that portfolios are rapidly rebalancing towards alternative Cryptos. Thematic tokens have also surged significantly, driven by the overall strength of altcoins. As of the time of writing, Bitcoin’s market share has rebounded to 60.1%.
On-chain dynamics.
On July 15, the inflow of Bitcoin to Exchanges surged to 81,000 BTC, the highest single-day inflow since February of this year. This inflow was driven by ‘whales’ and miners: the total volume of transfers over 100 BTC skyrocketed from 13,000 BTC to 58,000 BTC, while miner Outflow reached 16,000 BTC, nearly all deposited directly into Exchanges.
Ethereum displayed a similar pattern. On July 16, approximately 2 million ETH flowed into Exchanges, marking the highest single-day inflow since the end of February, with a total increase of 131% since April.
CryptoQuant also pointed out that miner wallet balances have decreased from 68,000 BTC to 65,000 BTC since June 26, further confirming the view that miners took profits during last week’s market conditions.
Large holders and miners are Selling at high levels, suggesting that the market may be at a local top or entering a phase of increased volatility. Historically, inflows of this scale often signal a price correction, thus this could be a cautious signal for traders. While overall bullish momentum still exists, these signals should not be ignored.
Singapore market maker Enflux is closely monitoring Technical Indicators. In a recent report to CoinDesk, the company wrote: ‘Liquidity remains healthy, and we are watching for confirmation signals from perpetual contract open interest and altcoin depth. If Ethereum’s dominance continues to rise, we expect the trailing market for mid-cap coins to continue into next week.’
Meanwhile, the inflow of altcoins remains sluggish. The daily trading volume of altcoins inflowing to Exchanges is only 31,000 trades, far below the level of 120,000 trades at the market tops in March and December 2024.
CryptoQuant believes this indicates low selling pressure, suggesting that altcoin holders may have stronger confidence, slower capital rotation, or are simply waiting for new catalysts. Currently, Bitcoin and Ethereum remain the focus of the market, but off-the-counter funds may become active again at any time.
The Japanese election drives the cryptocurrency tax reform process.
The Liberal Democratic Party of Japan faced its worst electoral defeat in decades. For the first time since 1955, it lost its majority in both houses of parliament. The coalition partner Komeito lost at least two seats in the Senate election on Sunday, failing to maintain control.
This historic change exacerbates unprecedented political instability amid rising living costs and stagnant wages. As populist opposition parties gain more leverage, Prime Minister Shigeru Ishiba faces calls from within the party to resign. The market expects increased volatility as the government negotiates from a weakened position.
The election results significantly accelerate discussions on cryptocurrency tax reform. The opposition parties broadly campaign on the platform of tax reduction, especially targeting crypto Assets. The Japan Blockchain Association has submitted a proposal to change the current maximum comprehensive taxation rate of 55% to a single separated taxation rate of 20.315%.
Despite high taxes, Japan remains the fifth largest cryptocurrency trading market in the world. The Bitcoin to Yen trading pair is the third largest market globally, and regulatory restrictions have not hindered demand. Institutional Bitcoin adoption is also accelerating in Japan, with MetaPlanet becoming the fifth largest institutional holder globally.
