Bitcoin was weak in August, and despite the market volatility, the U.S. stock market showed some resilience. For example, the Nasdaq rose slightly by 0.65% that month, while the Dow Jones Industrial Average hit a record high. At that time, the market was very heated about the extent of the September interest rate hike, but traders were more concerned about whether the U.S. economy would achieve a soft landing or a hard landing.
According to the current trend of US stocks, EMC Labs believes that the market generally expects the US economy to achieve a soft landing, so there is no large-scale sell-off of US stocks in anticipation of a hard landing. Under this expectation, some funds withdrew from the "Big Seven" stocks with large gains (most of which performed worse than the Nasdaq index this month) and turned to other blue-chip stocks with smaller gains, which also pushed the Dow Jones Index to a new high.
Based on past experience, we tend to believe that investors in the U.S. stock market view Bitcoin as an asset similar to the "Big Seven" - although the prospects are promising, there may be a risk of overvaluation at present, so there has been a certain scale of selling. However, compared with mainstream funds, the "Big Seven" is more attractive than Bitcoin, so after a sharp drop in price, the rebound of the "Big Seven" is also stronger than Bitcoin.
Currently, data from CME FedWatch shows that the probability of a 25 basis point rate cut in September is 69%, and the probability of a 50 basis point rate cut is 31%.
EMC Labs believes that if there is a 25 basis point rate cut in September and no major economic and employment data show that the economy does not meet the characteristics of a soft landing, then the US stock market may continue to run steadily. If the share prices of the "Big Seven" can recover, then the Bitcoin ETF may resume positive capital inflows, which may drive the price of Bitcoin up and challenge the psychological barrier of $70,000 again, or even set a new high. Conversely, if there is data showing that the economy does not meet the characteristics of a soft landing, the US stock market may be corrected downward, especially the "Big Seven". In this case, the inflow of funds to the Bitcoin ETF may not be optimistic, and the price of Bitcoin may fall again, challenging the support level of $54,000.
This forecast is based on the assumption that stablecoin channel funds will not show a trend change in September. In addition, although stablecoin channel funds continue to accumulate, we are cautious about it and believe that it is unlikely to drive Bitcoin out of an independent market. The most optimistic scenario is that against the backdrop of the recovery of the "Big Seven" stock prices, stablecoin and ETF channel funds will simultaneously flow in positively, driving up Bitcoin prices. If this is the case, then the possibility of Bitcoin breaking through its previous high is relatively high.
