Recession has arrived? US non-farm payrolls in July fell far short of expectations
Image source: https://hk.investing.com/economic-calendar/nonfarm-payrolls-227
The U.S. non-farm payrolls report for July surprised the market, with the number of new jobs hitting a three-and-a-half-year low and the unemployment rate rising to a three-year high, triggering the Sam Rule, a recession indicator with a 100% accuracy rate. Panic spread rapidly, and traders began to bet on the possibility of a 50 basis point rate cut in September, and predicted that the rate cut this year would exceed 110 basis points. This week, both U.S. stocks and Bitcoin rebounded after experiencing a significant decline.
The Sahm Rule is an indicator proposed by economist Claudia Sahm to predict economic recessions. The rule is based on changes in the unemployment rate and has a trigger condition: if the three-month moving average employment rate is 0.5 percentage points lower than the highest employment rate in the past 12 months, then the indicator is triggered, indicating that the economy may be about to or has entered a recession.
There are about 40 days until the next Federal Reserve interest rate meeting (2024.09.19)
https://hk.investing.com/economic-calendar/interest-rate-decision-168
Market technical and sentiment environment analysis
Sentiment Analysis Components
Technical indicators
Price Trends
In the past week, BTC price fell -5.61% and ETH price fell -16.26%.
The above picture is the price chart of BTC in the past week
The above picture is the price chart of ETH in the past week
The table shows the price change rate over the past week.
Price Volume Distribution Chart (Support and Resistance)
In the past week, BTC and ETH fell to a low level and formed a new intensive trading area before rebounding.
The above picture shows the distribution of BTC’s concentrated trading areas in the past week.
The above picture shows the distribution of ETH's dense trading areas in the past week.
The table shows the weekly intensive trading range of BTC and ETH in the past week.
Volume and Open Interest
In the past week, the trading volume of BTC and ETH was the largest when they fell to 8.5; the open interest of BTC and ETH both fell sharply.
The top of the above picture shows the price trend of BTC, the middle is the trading volume, the bottom is the open interest, the light blue is the 1-day average, and the orange is the 7-day average. The color of the K line represents the current state, green means the price rise is supported by trading volume, red is closing positions, yellow is slowly accumulating positions, and black is crowded.
The top of the above picture shows the price trend of ETH, the middle is the trading volume, the bottom is the open interest, the light blue is the 1-day average, and the orange is the 7-day average. The color of the K-line represents the current state, green means the price rise is supported by trading volume, red is closing positions, yellow is slowly accumulating positions, and black is crowded.
Historical Volatility vs. Implied Volatility
This past week historical volatility for BTC and ETH was highest at 8.5, while implied volatility for BTC and ETH both rose.
The yellow line is the historical volatility, the blue line is the implied volatility, and the red dot is its 7-day average
Event-driven
The non-farm data of the past week was significantly lower than expected, which pushed the mainstream currencies to continue to decline for several days after the data was released.
Sentiment Indicators
Momentum Sentiment
In the past week, among Bitcoin/Gold/Nasdaq/Hang Seng Index/SSE 300, gold was the strongest, while Bitcoin performed the worst.
The above picture shows the trend of different assets in the past week.
Lending Rate_Lending Sentiment
Over the past week, the average annualized return on USD lending was 11.1%, and short-term interest rates remained at 12.1%.
The yellow line is the highest price of the USD interest rate, the blue line is 75% of the highest price, and the red line is the 7-day average of 75% of the highest price.
The table shows the average return of USD interest rate for different holding days in the past
Funding Rate_Contract Leverage Sentiment
In the past week, the average annualized return on BTC fees was 5.8%, and contract leverage sentiment was gradually declining.
The blue line is the funding rate of BTC on Binance, and the red line is its 7-day average
The table shows the average return of BTC for different holding days in the past
Market Correlation_Consensus Sentiment
The correlation among the 129 coins selected in the past week was around 0.95, and the consistency between different varieties rose to a high level.
In the above figure, the blue line is the bitcoin price, and the green line is ['1000 floki', '1000 lunc', '1000 pepe', '1000 shib', '100 0x ec', '1inch', 'aave', 'ada', 'agix', 'algo', 'ankr', 'ant', 'ape', 'apt', 'arb', 'ar', 'astr', 'atom', 'audio', 'avax', 'axs', 'bal', 'band', 'bat', 'bch', 'bigtime', 'blur', 'bnb', 'btc', 'celo', 'cfx', 'chz', 'ckb', 'comp', 'crv', 'cvx', 'cyber', 'dash', 'doge', 'dot', 'dydx', 'egld', 'enj', 'ens', 'eos','etc', 'eth', 'fet', 'fil', 'flow', 'ftm', 'fxs', 'gala', 'gmt', 'gmx', 'grt', 'hbar', 'hot', 'icp', 'icx ', 'imx', 'inj', 'iost', 'iotx', 'jasmy', 'kava', 'klay', 'ksm', 'ldo', 'link', 'loom', 'lpt', 'lqty', 'lrc', 'ltc', 'luna 2', 'magic', 'mana', 'matic', 'meme', 'mina', 'mkr', 'near', 'neo', 'ocean', 'one', 'ont', 'op', 'pendle', 'qnt', 'qtum', 'rndr', 'rose', 'rune', 'rvn', 'sand', 'sei', 'sfp', 'skl', 's nx', 'sol', 'ssv', 'stg', 'storj', 'stx', 'sui', 'sushi', 'sxp', 'theta', 'tia', 'trx', 't', 'uma', 'uni', 'vet', 'waves', 'wld', 'woo', 'xem', 'xlm', 'xmr', 'xrp', 'xtz', 'yfi', 'zec', 'zen', 'zil', 'zrx'] overall correlation
Market Breadth_Overall Sentiment
Among the 129 coins selected in the past week, 6.3% of the coins were priced above the 30-day moving average, 12% of the coins were priced above the 30-day moving average relative to BTC, 9% of the coins were more than 20% away from the lowest price in the past 30 days, and 10% of the coins were less than 10% from the highest price in the past 30 days. The market breadth indicator in the past week showed that most coins in the overall market maintained a downward trend.
上图为['bnb', 'btc', 'sol', 'eth', '1000 floki', '1000 lunc', '1000 pepe', '1000 sats', '1000 shib', '100 0x ec', '1inch', 'aave', 'ada', 'agix', 'ai', 'algo', 'alt', 'ankr', 'ape', 'apt', 'arb', 'ar', 'astr', 'atom', 'avax', 'axs', 'bal', 'band', 'bat', 'bch', 'bigtime', 'blur', 'cake', 'celo', 'cfx', 'chz', 'ckb', 'comp', 'crv', 'cvx', 'cyber', 'dash', 'doge', 'dot', 'dydx', 'egld', 'enj', 'ens', 'eos','etc', 'fet', 'fil', 'flow', 'ftm', 'fxs', 'gala', 'gmt', 'gmx', 'grt', 'hbar', 'hot', 'icp', 'icx', 'idu', 'imx', 'inj', 'iost', 'iotx', 'jasmy', 'jto', 'jup', 'kava', 'klay', 'ksm', 'ldo', 'link', 'loom', 'lpt', 'lqty', 'lrc', 'ltc', 'luna 2', 'magic', 'mana', 'manta', 'mask', 'matic', 'meme', 'mina', 'mkr', 'near', 'neo', 'nfp', 'ocean', 'one', 'ont', 'op', 'ordi', 'pendle', 'pyth', 'qnt', 'qtum', 'rndr', 'robin', 'rose', 'rune', 'rvn', 'sand', 'sei', 'sfp', 'skl', 'snx', 'ssv', 'stg', 'storj', 'stx', 'sui', 'sushi', 'sxp', 'theta', 'tia', 'trx', 't', 'uma', 'uni', 'vet', 'waves', 'wif', 'wld', 'woo','xai', 'xem', 'xlm', 'xmr', 'xrp', 'xtz', 'yfi', 'zec', 'zen', 'zil', 'zrx' ] 30 日的各宽度指标占比
Summarize
Over the past week, the price of Bitcoin (BTC) and Ethereum (ETH) dropped significantly on August 5, when both cryptocurrencies peaked in volatility and volume. Open interest fell significantly, while implied volatility rose in tandem. Bitcoin’s funding rates continue to decline, possibly reflecting market participants’ waning interest in its leveraged trading. Market breadth indicators show that most cryptocurrency prices fell and the overall market continued to be under pressure. In addition, the non-agricultural data fell significantly short of expectations, pushing mainstream currencies to continue to decline for many days after the data was released.
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