Why are U.S. stocks and Bitcoin falling despite good non-farm data? In fact, not only are U.S. stocks and Bitcoin falling, but U.S. Treasury bonds are also falling, especially 1-year, 2-year, and 3-year Treasury bonds, which have fallen by more than 2%.

At the same time, the US dollar index is rising, and gold and oil are falling. These data reflect a phenomenon: the market is avoiding risks.

Investors have become more cautious and concerned about market risks, so they are pulling money out of stocks, cryptocurrencies and even gold and buying safer assets like U.S. Treasuries.

The yield on U.S. Treasury bonds is not bad now, with the one-year yield reaching more than 4%.

Will the Fed cut rates by 25 basis points or 50 basis points?

The recent non-farm payrolls data supports the Fed’s decision to cut interest rates. It is expected that the Fed will cut interest rates by 25 basis points on September 18.

However, the U.S. labor market is not optimistic, and a 25 basis point rate cut may not be enough to solve the problem.

If the rate cut is increased to 50 basis points, the market will worry whether this means an economic recession is coming. Therefore, the Fed is not willing to make a larger rate cut easily.

Why are investors so pessimistic?

Because in U.S. history, every interest rate cut is usually accompanied by a stock market decline.

Investors are worried that interest rate cuts will bring more market risks, so they choose to withdraw from the market and no longer distinguish which assets are safe and which are risky.

Although the market may perform well in the early stages of a rate cut if the economy does not go into recession, investors would rather run away first.

In addition, the U.S. stock market is currently fluctuating at a high level. Although Nvidia, as a leading company in the AI ​​field, has good financial performance, the market's expectations for it are too high, causing its stock price to fall.

This has shaken investors’ confidence in AI and even caused some panic. Because AI stocks have risen too much before, people are now starting to worry that their valuations are too high, leading to an overall decline in technology stocks.

Bitcoin and Ethereum are also considered part of the technology sector, so it is normal for them to fall along with the technology stocks.

So overall, this decline was mainly due to investors' risk aversion.

Whenever the U.S. market opens, selling pressure intensifies, which can also be seen in the data of spot ETFs.

Bitcoin falls, but long-term holders remain strong

As of 8:00 a.m. Beijing time today, there is still no sign of long-term holders surrendering. Even though the price of BTC has temporarily fallen below $54,000, long-term holdings of BTC continue to increase.

After the recent drop in BTC prices, we can see that the exchange's inventory has also declined, indicating that the low price has not released more inventory, but has allowed more long-term holders to buy. This also shows that BTC is continuing to transfer to long-term and high-net-worth users.

It is obvious from the data that those currently participating in the turnover are short-term holders, and the short-term active BTC is gradually decreasing.

Although a reduction of zero is impossible, it also illustrates the attitude of investors. They can choose not to buy, but they are not resolute in selling the BTC they already hold. The data transferred to the exchange in recent times also show that whenever the price falls, the selling pressure is greatly reduced, which means that more investors are not willing to participate in turnover.

But I cannot say that this means the price will not fall, because the current liquidity is too poor. Even a small amount of selling may lead to a drop in prices. I don’t know whether it will continue to fall, and I still don’t know how much it will fall. But what I can see is that a decline will only make the circulation in the market less and less. If we want prices to rise, we have to wait for sentiment or liquidity to recover.

The next two days are weekends, and market liquidity will be worse. If panic spreads, there may be a bigger drop.

Why are US stocks and Bitcoin falling despite good non-farm data?

In fact, not only are U.S. stocks and Bitcoin falling, but U.S. Treasury bonds are also falling, especially 1-year, 2-year, and 3-year Treasury bonds, which have fallen by more than 2%.

At the same time, the US dollar index is rising, and gold and oil are falling. These data reflect a phenomenon: the market is avoiding risks.

Investors have become more cautious and concerned about market risks, so they are pulling money out of stocks, cryptocurrencies and even gold and buying safer assets like U.S. Treasuries.

The yield on U.S. Treasury bonds is not bad now, with the one-year yield reaching more than 4%.

Will the Fed cut rates by 25 basis points or 50 basis points?

The recent non-farm payrolls data supports the Fed’s decision to cut interest rates. It is expected that the Fed will cut interest rates by 25 basis points on September 18.

However, the U.S. labor market is not optimistic, and a 25 basis point rate cut may not be enough to solve the problem.

If the rate cut is increased to 50 basis points, the market will worry whether this means an economic recession is coming. Therefore, the Fed is not willing to make a larger rate cut easily.

Why are investors so pessimistic?

Because in U.S. history, every interest rate cut is usually accompanied by a stock market decline.

Investors are worried that interest rate cuts will bring more market risks, so they choose to withdraw from the market and no longer distinguish which assets are safe and which are risky.

Although the market may perform well in the early stages of a rate cut if the economy does not go into recession, investors would rather run away first.

In addition, the U.S. stock market is currently fluctuating at a high level. Although Nvidia, as a leading company in the AI ​​field, has good financial performance, the market's expectations for it are too high, causing its stock price to fall.

This has shaken investors’ confidence in AI and even caused some panic. Because AI stocks have risen too much before, people are now starting to worry that their valuations are too high, leading to an overall decline in technology stocks.

Bitcoin and Ethereum are also considered part of the technology sector, so it is normal for them to fall along with the technology stocks.

So overall, this decline was mainly due to investors' risk aversion.

Whenever the U.S. market opens, selling pressure intensifies, which can also be seen in the data of spot ETFs.

Bitcoin falls, but long-term holders remain strong

As of 8:00 a.m. Beijing time today, there is still no sign of long-term holders surrendering. Even though the price of BTC has temporarily fallen below $54,000, long-term holdings of BTC continue to increase.

After the recent drop in BTC prices, we can see that the exchange's inventory has also declined, indicating that the low price has not released more inventory, but has allowed more long-term holders to buy. This also shows that BTC is continuing to transfer to long-term and high-net-worth users.

It is obvious from the data that those currently participating in the turnover are short-term holders, and the short-term active BTC is gradually decreasing.

Although a reduction of zero is impossible, it also illustrates the attitude of investors. They can choose not to buy, but they are not resolute in selling the BTC they already hold. The data transferred to the exchange in recent times also show that whenever the price falls, the selling pressure is greatly reduced, which means that more investors are not willing to participate in turnover.

But I cannot say that this means the price will not fall, because the current liquidity is too poor. Even a small amount of selling may lead to a drop in prices. I don’t know whether it will continue to fall, and I still don’t know how much it will fall. But what I can see is that a decline will only make the circulation in the market less and less. If we want prices to rise, we have to wait for sentiment or liquidity to recover.

The next two days are weekends, and market liquidity will be worse. If panic spreads, there may be a bigger drop.