On Monday (August 26), the US dollar index fell to 100.65, gold soared to $2,516, and Bitcoin surged in the short term to hit the $65,000 mark.
At the same time, the situation in the Middle East escalated suddenly. Israel and Hezbollah had the most intense exchange of fire in months. The Israeli army launched air strikes in southern Lebanon and urgently ordered the evacuation of part of the Al-Aqsa Hospital near Deir el Balah.
Federal Reserve Chairman Powell sent a dovish signal, suggesting that the critical moment for policy adjustment has arrived.
Israel, Lebanon's Hezbollah exchanged heavy fire over the weekend
Israel and the Lebanese militant group Hezbollah exchanged heavy fire early Sunday, sending a cross-border conflict into the Middle East, the Associated Press reported. As Egypt restarted high-level talks to ease tensions between Israel and Hamas in the Gaza Strip, Hezbollah launched hundreds of rockets and drones to attack an Israeli military intelligence station near Tel Aviv.
Israel said it carried out dozens of preemptive air strikes to try to prevent a larger attack, but neither side has provided hard evidence.
Hezbollah leader Hassan Nasrallah said the attack was in retaliation for Israel's assassination of a senior militant commander in Beirut last month, and that although the attack was delayed to give Gaza ceasefire talks a glimmer of hope, conflict could not be avoided in the end.
Meanwhile, Al Jazeera reported that Israel ordered the emergency evacuation of parts of the Al-Aqsa Hospital, the only functioning hospital in central Gaza, as the situation in the region became increasingly dangerous and tense as the Israeli army launched air strikes on southern Lebanon.
Reuters reported that the ceasefire mediation talks in Gaza had reached a deadlock and the situation had escalated rapidly. Sources revealed that the Hamas delegation had left the Egyptian capital Cairo and the talks had ended in failure.
Israel's military operations in Gaza have killed at least 40,334 people and injured 93,356. Looking back at the Hamas-led attack on October 7, 2023, which killed 1,139 people in Israel, the tragic casualties highlight the severity of the conflict.
Powell: The time has come to adjust policy
At the central bank’s annual meeting in Jackson Hole, Wyoming, Fed Chairman Powell made it clear: “The time is ripe for policy adjustments, and our confidence that inflation will move towards 2% has increased significantly.
We do not want the labor market to cool further and will do everything we can to support its strength while making progress toward price stability. The current level of the policy rate provides ample room to address potential risks, especially any further weakness in the labor market."
Powell also pointed out that the Fed's direction forward has been clear, and the timing and extent of interest rate cuts will be determined based on the balance of data, economic prospects and risks. Upward risks to inflation have weakened significantly, but downside risks to the labor market have increased.
Nick Timiraos, a reporter for the Wall Street Journal, commented on Twitter (now known as X): "Powell has completed the policy shift. From two years ago when he hinted at accepting a recession to restore inflation to normal, to now turning to a dovish policy, he shows his new strategy for dealing with the economy."
Bitcoin Technical Analysis
CoinTelegraph reported that Bitcoin broke through the 50-day simple moving average of $61,759, indicating that bearish pressure has eased.
The 20-day exponential moving average has started to rise to $61,110, and the relative strength index (RSI) has jumped into the positive zone, showing that the bulls are making a comeback. The current minor resistance is at $65,660, and if this level is broken, Bitcoin is expected to hit the $70,000 mark.
However, the bears will not leave easily and they may try to push the price back below the moving averages to trap the aggressive bulls. If so, Bitcoin may drop to $57,787 or even to $55,724.
The bulls are facing selling pressure near $65,000, but they will try hard to protect the support of 20-day exponential moving average. If the price rebounds off 20-EMA and breaks out of $65,000, it will boost the prospects of a rally above $65,660.
Conversely, a break below the 20-day EMA will indicate that the bulls may have lost their buying interest, which can drag the price towards the 50-day SMA. If this support is breached, it could mean that the bulls have completely lost their advantage.
In the DeFi era, the NFT era, and the inscription era, we have all witnessed the same story: a large amount of funds poured into the market, and fierce PVP competition followed. However, the excessive dispersion of funds caused the market value of the Golden Dog to slide from 1 million to 100,000, and may eventually fall to 10,000, and the market story may end here. If there is no new narrative, funds will quickly flow back to mainstream currencies.
This is why I have been calling on everyone to pay attention to mainstream public chains, DeFi, RWA, AI and other fields recently. Because the meme bubble will eventually burst, and funds will quickly return to the mainstream. In addition, as players on each chain only focus on the public chain ecological projects they hold, it will be difficult for an absolutely unified large-scale narrative to emerge in the future.
Facing such a market, Wanfeng's suggestion is to follow the strength of public chains and make investments. Top public chains such as BTC, ETH, SOL, BASE, TON and TRON must be the focus, followed by other projects.
Therefore, it is crucial to finally choose the leading track in the strong-level public chain. For example, the inscription and rune leader in the Bitcoin ecosystem, the DeFi leader in the Ethereum ecosystem, or the GameFi leader in the Ton ecosystem. If you choose the right track, your future investment will be twice as effective with half the effort!
Okay, that’s all the information for this issue for now.
