On the macro level, the August retail sales data, which is known as the horror data, was released last night, which exceeded expectations. This has injected a shot of adrenaline into the market, and the expectation of recession has weakened. At 2 a.m. tomorrow, we will usher in an important moment. The Federal Reserve will hold an interest rate decision meeting, and Federal Reserve Chairman Powell will hold a press conference at 2:30. At present, the probability of a 50 basis point rate cut given by CME has reached 66%, and the probability of a 25 basis point rate cut has dropped to 34%.
Nick, the Fed's "mouthpiece", has published another article. If this article is from the Fed, then the market is more likely to cut interest rates by 50 basis points. The article implies that the Fed will cut interest rates by 50 basis points. I personally think that if the interest rate is cut by 25 basis points this time, the divergence of funds will be smaller and the expectation of recession will be weakened. However, if the interest rate is cut by 50 basis points directly, it may cause market panic and cause funds to leave the market and wait and see, which is not conducive to the price trend of risky assets.
The process of interest rate cut is a long-term event. The overall logic is that with the interest rate cut, market liquidity will get better and better, but the effect on the capital market will not be apparent until the later stage of the interest rate cut cycle. In the early stage of interest rate cut, especially the first interest rate cut, the smaller the better. Compared with a large interest rate cut, a smaller interest rate cut will relieve market concerns and is more conducive to the smooth operation of the capital market. So according to this logic, the 25 basis point interest rate cut this time will be relatively better.
Regarding ETFs, on September 7, the U.S. Bitcoin spot ETH had a net inflow of US$186 million, and the Ethereum spot ETF had a net outflow of US$15.11 million.
On the chain, Mayer (Meyer multiple) has dropped from the highest 1.82 in this bull market to the current 0.9. Generally, the bottom of the large historical cycle is between 0.7 and below 0.7. If the Mayer multiple drops to around 0.7, it can be determined that the market will reach the bottom of a large cycle.
In terms of market conditions, there is no problem with the trend. The right side has risen strongly, but this is related to the positive retail data released yesterday. In terms of form, it is still a shock within the large-scale shock zone. If we observe from a larger perspective, the overall supply of the market is definitely not strong. The problem is that the market has no money-making effect in the past six months, the funds in the market are not active, and the new funds are insufficient, resulting in insufficient demand, so the currency price is always in the adjustment stage.
The Federal Reserve's interest rate decision tomorrow morning is a very significant macro uncertainty event, which will cause fluctuations in the short-term market trend. I think a 25 basis point rate cut will be a positive, while a 50 basis point rate cut may become a short-term negative and requires special attention. The short-term price pressure is around 64,000, with support in the 54,000-57,000 range.
ETH is weakly linked, the exchange rate breaks, and there is a divergence at the daily level, and there is a need for an oversold rebound.
As for the copycats, individual projects have taken the lead in coming out of the bottom, such as SUI, and most other copycats are still in the trend of bottoming out. They need to be fully and completely done to have a chance of a big rise in the future. Be patient.
