Crypto Markets Face Cooling Phase, Volatility Risks Increasing

Matrixport’s recent report highlights a seasonal cooling phase in the crypto market, with Bitcoin and Ethereum showing overbought conditions as of latest technical indicators.

The anticipated consolidation suggests potential volatility for leveraged positions, challenging confidence amid Ethereum’s open interest surge and the delayed U.S. crypto policy report.

Crypto Market Enters Overbought Territory, Matrixport Warns of Pullback

Matrixport, led by Jihan Wu, forecasts a seasonal cooling phase in crypto markets, with Bitcoin and Ethereum in overbought conditions, raising short-term pullback risks. In their analysis, Matrixport highlights the potential for a consolidation trend lasting until August.

The evolving market climate is marked by increased volatility and liquidation risks for highly leveraged positions. Ethereum open interest surged from $14 billion to $25 billion, a rapid funding rate rise also contributes to elevated holding costs and potential risk.

Institutional inflows into Ethereum ETFs remain strong, enduring market consolidation phases. Market commentator @rovercrc noted, “Ethereum open interest has reached exceptionally high levels, signaling potential increased volatility.” Such insights underscore the market’s evolving dynamics amid the cooling phase.

Historical Patterns Align with Expected Summer Price Consolidation

Did you know? Historical patterns reveal past summer consolidations in Bitcoin and Ethereum following pronounced spring rallies, reflecting current analyst predictions of cooling phases.

As of July 28, 2025, Ethereum (ETH) is priced at $3,902.18 with a market cap of $471.04 billion, holding 11.91% market dominance. Recent price movements show a 2.98% increase in 24 hours, a 61.18% surge over 30 days, indicating robust market activity (CoinMarketCap).

Coincu research anticipates potential financial and regulatory shifts driven by the “GENIUS Act“, focusing on stablecoins linked to U.S. Treasury bonds. This reflects a broader strategic positioning of digital assets, influencing future crypto asset cycles.