Daily Summary:
BTC and ETH rebounded sharply, but the market still lacks sustained capital inflow
Bitcoin contract holdings dropped by more than 30% to $25.8 billion
According to Tide Capital, the total open interest of Bitcoin futures contracts on the entire network has dropped to US$25.8 billion, a drop of more than 30%, and the funding rate has turned sharply negative. A large number of leveraged long positions have been closed, and the market trading volume has increased significantly. The fastest phase of the market decline may have ended.
Global stock markets rebounded, and Japanese stock market rebounded violently by 10%
Following yesterday's general plunge in risk asset markets, U.S. stock index futures continued to rise, with Nasdaq futures up 2%, S&P 500 futures up 1.5%, and Dow futures up 1%. Japan's Topix index futures triggered the circuit breaker mechanism upward, South Korea's KOSPI index rose 5%, and the Nikkei 225 index rose 9.7%.
In terms of cryptocurrencies, Bitcoin rose 3.83% and Ethereum rose 5.05%.
Data: Cryptocurrency Fear and Greed Index fell to 17 today, a new low in the past two years
According to Alternative data, the cryptocurrency fear and greed index fell to 17 today (the index was 37 yesterday), indicating that the market is currently in a state of extreme fear and the index has hit a two-year low.
Market analysis: The overall market rebounded sharply, but the outlook is still not optimistic
Market Trends
Yesterday, after falling below $50,000 twice during the day, BTC (Bitcoin) started a wave of rising prices, reaching a high of $56,000, and the overall trend was wide fluctuations. However, BTC spot ETF still saw a large net outflow of $168 million, indicating that the current rise is likely to be just a short-term oversold rebound, and market sentiment is still relatively cautious. It may take time for the market to recover in the short term.
ETH once fell to $2,100 yesterday, and Jump Trading was suspected of liquidating its ETH positions. This news had a certain impact on market sentiment. But then ETH rebounded with the market, and the price rose back to above $2,500. The outflow of ETH spot ETFs has been greatly reduced, and the overall trading volume is also small, indicating that the market sentiment towards ETH has eased.
In terms of altcoins, although they generally followed the market rebound, there was no obvious leading coin and the overall performance was relatively stable.
Data indicators
Today's AHR999 index is 0.57, getting closer to the bottom-hunting index, which means that the market may be gradually approaching the bottom area. The fear and greed index is 17, indicating that market sentiment is still in a state of extreme fear, and it is expected that this sentiment will continue for some time.
Market Hotspots
BTC Ecosystem: BTC has risen by more than 10% from its intraday low, and other related tokens such as SATS, BAKE, and BADGER have performed well. Among them, SATS is the strongest mainstream altcoin in the market, with an intraday low increase of more than 50%. In addition, unisat will release BTC layer2 in September, which is a positive factor for market news and may further promote the development of the BTC ecosystem.
Meme sector: Some of the tokens in the Meme sector fell by more than 30% during the day, but most of them have rebounded with the market. MIGGLES performed particularly well, rising nearly 100% from its intraday low; POPCAT rose 60% from its intraday low; WIF rose nearly 30% from its low, and PEPE rose 25% from its low. In general, the larger the market value of the Meme coin, the smaller the rebound, indicating that more market funds have flowed to Meme coins with smaller market value.
AI sector: TAO and ARKM surged, indicating that the market still has a certain degree of attention to the AI sector, but Nvidia, the leading AI stock in the US, has continued to fall sharply recently, and its founder has been cashing out and leaving the market, which lacks market hotspot stimulation for the short-term market of the AI sector.
Macroeconomics: Stock market rebounds after sharp drop, and expectations of Fed rate cuts strengthen
On Monday, with the shadow of the US recession looming and concerns about the overheating of technology stocks, global risk aversion was high and assets were sold off. The Nikkei index plummeted 12%, and the Seoul KOSPI index plummeted 9%. The US stock market continued the plunge in the Asia-Pacific stock market. The S&P and Dow Jones Industrial Average recorded the largest single-day decline in nearly two years, with the latter falling more than 1,000 points. The Nasdaq also fell more than 3%, and large technology stocks collectively plummeted. More than one trillion US dollars evaporated from global stock markets.
Some analysts believe that market concerns about a US recession are the main reason for the global market collapse. Last Friday, the unemployment rate announced by the US Department of Labor unexpectedly rose to 4.3%, the highest since October 2021, triggering the Sam Rule. According to historical experience, the "Sam Rule" has been verified in all nine US recessions since 1960. However, the Federal Reserve still chose to maintain the central bank's interest rate at its highest level in 20 years last week, and investors are worried that the central bank is too slow to relax monetary policy.
After the global collective plunge on "Black Monday", Japanese and South Korean stock markets began to rebound on Tuesday. The Nikkei 225 Index and the Topix Index both rebounded more than 8%, the biggest gain since October 2008, as exporters such as technology companies and automakers surged after the yen fell about 1% against the dollar. Nikkei 225 Index futures rose 8%, hitting the circuit breaker upward. Bank stocks soared 10% after a 17% plunge on Monday. All 33 sector indexes of the Topix Index climbed. The yen fell more than 1% against the dollar, ending the yen's five-day acceleration after the Bank of Japan raised interest rates last week.
“The panic selling may be over,” said Hideyuki Ishiguro, chief strategist at Nomura Asset Management. “Nevertheless, today’s price action is likely to be a roller coaster ride as anxiety in global markets grows.”
Summarize
The overall market sentiment is relatively cautious. Although BTC and ETH have rebounded, the outflow of large amounts of funds and the extreme fear of market sentiment indicate that this wave of rebound may only be a short-term oversold rebound, and the market needs time to recover in the short term. Although the altcoin and Meme sectors have rebounded, their performance is not very strong. Investors need to remain vigilant and wait for the market sentiment to stabilize further.
