At 8 pm on August 29, in a live broadcast on Matrixport’s official YouTube channel, Daniel, head of Matrixport’s asset management, analyzed why Bitcoin fell from $65,000 to $58,000 this week (August 25-August 31) and how investors can obtain greater returns in the current context.
Affected by geopolitics and the poor performance of US tech stocks, Ethereum also performed weakly, with declining on-chain activity and weakening market confidence. Market sentiment has shifted from optimistic to neutral or pessimistic, and institutions' selling at highs in the options market shows a lack of confidence in a short-term rebound. He suggested that investors concentrate on holding top currencies such as Bitcoin and Ethereum, and use structured products such as Dual Currency and Snowball to lock in profits. At the same time, it is recommended to remain cautious and pay close attention to large transactions and market capital flows.
The live broadcast content is as follows
The price of Bitcoin has dropped sharply from $65,000 to $58,000, and the market has been in a state of violent volatility. The unilateral upward trend is difficult to maintain, and investors face huge challenges in short-term trading. Investor sentiment has quickly turned from optimistic to neutral or pessimistic, and market risks need to be reassessed.
Analysis of the causes of market fluctuations
Geopolitical influence and selling pressure
Legal issues in Russia, particularly the arrest of Telegram’s founder in France, have had a significant impact on the crypto market. As a result, the price of TON chain tokens fell sharply. This incident triggered widespread concerns in the market and further aggravated investor panic.
Recently, large Bitcoin transfer records on the chain have triggered market concerns about potential sell-offs. Investors generally believe that these large transfers may mean that large investors are selling assets, causing Bitcoin prices to fall further. This situation has amplified the selling pressure in the market and increased the downward pressure on prices.
Bitcoin Market Sentiment and Pressure
After Bitcoin prices retreated from their highs, market sentiment has become more neutral and the strength of the rebound has been suppressed.
In the futures market, as the price of Bitcoin fluctuates, the arbitrage opportunities of the basis of futures contracts are gradually reduced. The decline in arbitrage returns reflects the increasing difficulty of market transactions, especially in volatile markets, where the effectiveness of arbitrage strategies is greatly reduced. In this case, it is more difficult for investors to obtain stable returns through traditional arbitrage methods.
US stock performance and crypto market correlation
The performance of U.S. tech stocks has had a significant impact on the crypto market, especially when tech giants such as Nvidia failed to meet market expectations, causing market confidence to falter. This negative sentiment has spread to the crypto market, and investors' concerns about the macro economy have increased, further affecting investment decisions in crypto assets. Chinese concept stocks, including Pinduoduo, have suffered a sharp drop, triggering market doubts about the high valuations of tech stocks and crypto assets. This doubt has further suppressed the market's risk appetite, and investors are more inclined to reduce risk exposure in the face of high volatility.
ETF fund outflow and market selling pressure
Since August 6, Bitcoin ETF funds have seen the largest outflow, showing that institutional investors are pessimistic about the short-term prospects of the market and are not too bearish. This large-scale outflow of funds has increased the selling pressure in the market, further deteriorating market sentiment.
This directly led to intensified selling pressure in the market, and the long-short game around the Bitcoin price of around $60,000 became more intense, further expanding market volatility.
Ethereum Performance and On-Chain Activity
Ethereum’s performance is weaker than Bitcoin. The lack of liquidity in Ethereum’s ETFs, coupled with the decline in on-chain activity, reflects the market’s weakening confidence in the Ethereum ecosystem. The continued selling by institutional investors has increased market pressure on Ethereum, and the price continues to fall relative to Bitcoin.
Options Market and Institutional Behavior in the Current Context
By analyzing the order book of the options market, it can be found that institutional investors have insufficient confidence in the future unilateral rise of the market and are more inclined to reduce their holdings on rallies. Orders show that market expectations tend to be conservative, and investors are generally cautious about a significant rise in the short term.
Institutional investors' reduction of holdings at specific price points indicates that they want to lock in gains and reduce risk exposure. This trading behavior suggests that the market will maintain a volatile pattern and the possibility of a unilateral rise is low.
Investment directions to watch
Focus on volatility and seek stable returns
Combining multiple market indicators such as the basis of options and futures can further verify the cautious sentiment of the market. These indicators show that the market remains conservative in the short-term trend. Investors should adjust their strategies accordingly to reduce excessive risk exposure and ensure stable investment returns in an uncertain market environment.
In the current highly volatile market environment, structured products such as Dual Currency and Snowball have become effective tools to deal with market uncertainties. These products enable investors to lock in returns in a volatile market and reduce losses caused by market fluctuations through cleverly designed return structures. Dual Currency products allow investors to obtain different returns in different price fluctuation ranges, while Snowball products provide investors with fixed returns when the market triggers certain conditions through a flexible observation period design.
In a high volatility environment, volatility trading becomes a key strategy. By using time value-added option products, investors can improve their tolerance and increase their strategy flexibility in a volatile market. This trading strategy allows investors to obtain stable returns through reasonable layout and timely adjustment of strategies when the market fluctuates violently.
Fund allocation tends to be towards mainstream assets, focusing on risk resistance
In the current highly volatile market, investors are advised to concentrate their assets on top currencies such as Bitcoin and Ethereum. The increasing share of top currencies in the market reflects that institutional investors are more inclined to choose assets with strong risk-averse properties when dealing with market uncertainties. Compared with other small and medium-sized tokens, these top currencies have relatively low volatility and higher market recognition, so they show better risk resistance during market fluctuations.
As market uncertainty intensifies, the hedging advantages of top currencies become more and more obvious. Against the backdrop of declining risk appetite, investors pay more attention to the security and robustness of assets and choose to allocate more funds to top assets such as Bitcoin and Ethereum to avoid systemic risks.
Make good use of tools to reduce costs and better manage risks
The Decumulator product launched by Matrixport provides miners and large investors with the opportunity to reduce their holdings at a premium when the market price is higher than the agreed price. This product allows investors to achieve stable cash flow in market fluctuations while maintaining the long-term appreciation of assets. This strategy is very suitable for investors who want to gradually reduce their holdings at market highs, which can not only lock in part of the gains, but also continue to participate in the potential rise of the market.
Through low-cost collar strategy financing, investors can obtain financing costs as low as 2% without the need for margin calls. This strategy not only reduces the cost of using funds, but also provides investors with effective downside protection, allowing them to flexibly respond to funding needs when the market fluctuates and avoid the risk of forced liquidation caused by drastic market fluctuations.
Matrixport’s collar strategy product provides investors with a high loan-to-value financing option, allowing them to obtain high financing without triggering margin calls. This financing method not only reduces investors’ capital costs (as low as 2%), but also increases capital utilization, allowing them to manage capital needs more flexibly during market fluctuations. Compared with traditional high-cost borrowing, the collar strategy has become an ideal tool for coping with market fluctuations with lower interest rates and flexible financing conditions.
The collar financing program also helps investors protect their downside risks when the market fluctuates drastically by setting up and down exercise prices. This structured protection mechanism ensures that investors will not face the risk of forced liquidation even when the market falls sharply, thereby better maintaining the stability and security of the investment portfolio.
Summarize
In the current market full of uncertainty, structured products have become an important tool for investors to ensure asset preservation and appreciation. By choosing structured products that suit their risk preferences and investment goals, investors can find certain returns in market fluctuations. Matrixport's product design combines a variety of market strategies, providing investors with diversified options to cope with complex market environments, ensuring that their investment portfolios can still achieve long-term and stable growth in volatile markets.
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About Matrixport Weekly Market Insights
【Matrixport Weekly Market Insights】is a new interactive knowledge sharing column launched by Matrixport, which is broadcast live on the official YouTube channel of Matrixport every week. This column will regularly invite industry product leaders, top analysts and KOLs to discuss investment logic under different market conditions, share investment experiences, and help users realize asset appreciation.
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Disclaimer: The above content does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy to residents of the Hong Kong Special Administrative Region, the United States, Singapore, and other countries or regions where such offers or solicitations may be prohibited by law. Digital asset trading may be extremely risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
