This Wednesday, the minutes of the June meeting will be released, which will be the key to testing the rebound trend.

Written by: Blockchain Knight

In the past week, Bitcoin rebounded by about 12%. On the surface, it seems to be boosted by the influx of ETF funds and previous employment data, but following this line of thought will reveal that the sustainability of this rebound is questionable.

First, regarding ETFs, on July 6, the net inflow into U.S. spot Bitcoin ETFs was about $266 million, of which BlackRock's IBIT accounted for $209 million, while Grayscale's GBTC continued to see outflows.

However, a net inflow supported by buyers is difficult to see as evidence of recovering institutional demand. If ETF buying does not spread to other issuers in the next few days, then the green column on July 6 may be just a temporary respite rather than a trend reversal.

Of course, the real catalyst for the rebound was last week's U.S. employment report, which, due to better-than-expected data, caused the market to reprice the rate hike path and drove Bitcoin's rebound.

But the problem is that this rebound is based on market expectations of the Fed shifting to a dovish stance, and the labor data on which these expectations are based was published only after the June meeting concluded.

This Wednesday, the minutes of the June meeting will be released, which will be the key to testing the rebound trend.

If the minutes show that officials were discussing the risks of slowing employment at that time, the rebound will have a foundation; if the focus of the discussion remains on inflation and the conditions for another rate hike, then the gains of the past week will become quite fragile.

On-chain data also indicates some risks, as some large holders transferred about 49,000 BTC to exchanges around the $60,000 mark, equivalent to positioning for potential sell orders before the minutes are announced.

It is worth noting that alongside Bitcoin's rebound is the decline in dominance of the leading cryptocurrency.

Bitcoin's market share dropped from 58% to 54%, while the total market cap share of other assets rose from 19% to 24.5%, but whether this can prove that the market is rotating remains doubtful.

However, the leading assets all share a common characteristic: they have real income that is directly converted into buybacks or burns. For instance, Hyperliquid uses over 97% of its fees for buybacks and has increased by 200% this year; similarly, Lighter rose by 80% after initiating buybacks and burns.

Moreover, DeFi veteran Aave linked protocol income to automatic buybacks, rising by 60%; the Jupiter proposal increased buybacks to 70% of fees and also rose nearly 60%.

Thus, current funds are mainly concentrated in a few projects with buyback mechanisms and institutional narratives, which is healthier than the past environment where everything soared, but it also means that once the catalysts materialize or fall short of expectations, these leading performers may quickly lose their support.

Bitcoin's rebound is about to face the test of the meeting minutes, while the high volatility of altcoins means that when the market retracts, the leading varieties will also quickly experience sell-offs.

It seems that the market is beginning to validate a logic where on-chain income starts to form direct price support, rather than just being narrative-driven.

This corresponds to what I have repeatedly mentioned before: the industry is moving away from a narrative-driven economy and entering an era that truly values growth and value, which is a true boon for the industry’s development.

Projects that previously relied on narrative growth will temporarily be relegated to the sidelines and may have to wait until the next "chicken and dogs rise to the sky" moment to have a chance to show their face; before that, evaluating projects against the stock market's balance sheets will become the new trend.