Market Analysis – Global markets crash, opportunities always appear in desperate times
Global stock markets plunge
As we all know, global financial markets experienced a comprehensive shock on Monday. Asian stock markets led by Japan plummeted. Major indexes such as the Nikkei 225 and Topix stock prices triggered circuit breakers due to the sharp decline. The intraday decline of the Nikkei 225 once exceeded the "Black Weekend" in 1987. 1", and finally closed down 12.4%, the second largest decline in the history of the Japanese stock market.
In addition to Japan, Asia-Pacific stock markets including South Korea, Taiwan, Australia, Singapore, etc. all experienced sharp declines to varying degrees. The United States was also not immune after opening in the evening. The Nasdaq index collapsed by more than 1,000 points, reaching 6.34%; the S&P 500 fell by 3.65%.
Of course, against the background of the global plunge in risk assets, cryptocurrencies are naturally not immune. The trend of BTC in the past seven days has been a disaster. The price has broken through the strong support of US$60,000 and US$54,000, reaching a minimum of US$49,000. In the past seven days, The maximum decline reached 30%, not to mention other altcoins. This decline also caused extreme panic in the market. In the past two days, as the global stock market rebounded, the currency market also rebounded significantly, and BTC fell from its lowest point. After rebounding to around US$57,000, Meme Coin and SOL rebounded the most, reaching more than 20%, but there is still a long way to go before returning to the starting point of the decline.
Overall, the reasons for this sharp decline are mainly composed of two factors:
U.S. recession fears
Employment data released by the U.S. Department of Labor last week showed that nonfarm payrolls increased by only 114,000 in July, well below expectations of 176,000. Meanwhile, the unemployment rate was 4.3%, above expectations of 4.1%. This triggered the so-called "Sahm rule" discovered by economist Claudia Sahm, which states that if the unemployment rate over the past three months is on average 0.5 percentage points higher than the average of the lowest three months in the past 12 months, the economy will be in recession. The probability will be more than 90%. The market's confidence in a "soft landing" has been greatly affected.
Japan unexpectedly raises interest rates
The Bank of Japan unexpectedly raised short-term policy rates last Wednesday and said it would raise more rates in the future, causing the yen to soar. In addition to weakening the export competitiveness of Japan's manufacturing industry, this move also triggered a large-scale liquidation of the "yen carry trade".
The Bank of Japan began to implement low interest rate policies in the late 1990s. The subsequent "Abe Three Arrows" and "negative interest rate policies" have allowed Japan to maintain a loose monetary policy for a long time. Due to the low cost of borrowing, many people will use extreme measures to Borrow Japanese yen at low interest rates and then invest the borrowed funds in high-interest currencies or high-yield assets to earn interest differentials, forming the so-called "yen arbitrage trade". As a result, many assets flow into the United States and other overseas countries. market.
However, the Bank of Japan unexpectedly raised interest rates by 15 basis points last Wednesday and unveiled plans to scale back bond purchases, raising its policy rate (the unsecured overnight lending rate) to 0.25% from a range of 0% to 0.1%. The rapid rise of the yen, rising loan costs, and concerns about the U.S. economic recession have combined to cause a large number of investors to withdraw funds from risky assets and then exchange them for yen to repay debts.
Is the stock market rout over?
However, global stock markets rebounded sharply the next day after Monday's panic selling. Bank of Japan Vice President Shinichi Uchida also instilled confidence in the market today, saying that Japan is not in a position where "if interest rates are not raised at a certain pace, policy responses will lag behind." ” situation, so if the market continues to be unstable, it will be necessary to maintain the current loose policy in the short term, which will greatly ease the pressure to unwind positions caused by Japan’s interest rate hikes.
However, concerns about a U.S. economic recession still exist. Many economists and investment bank analysts in the United States have begun to raise the possibility of the Federal Reserve cutting interest rates by 2% in September. It is still too early to say whether the stock market has bottomed.
Counterattack to pull up after sharp decline
BTC has rebounded strongly in the past two days. On the short-term hourly line, a rising wedge has been formed in the short term. This pattern occurs after a period of sharp decline. The probability of subsequent falling below this pattern is greater. The current trend has come to an end. In the narrowing part, there may be a short-term decline back to the recent support of $54,000-$55,000, so now is not the time to rush into the market on a rebound.
On the contrary, you can pay close attention to when the price falls to the support level and you can start to receive spot goods. Usually it is more difficult to guess where the bottom is in the first wave of decline. After the first large rebound appears, the bottom position becomes more certain. For reference, at the same time, the stock markets of various countries began to stabilize yesterday, and the negative news seems to have been alleviated in the short term. And currently, BTC is indeed at a relatively low point on the daily line, and the daily closing needle is of great reference, which is a time point for bargain hunting intervention.
First of all, it is recommended to pick up the spot in the form of segmented DCA. It is not recommended to touch the contract now. In the past, it took several weeks to consolidate and repair after a sharp decline. It will be very difficult to make contracts during the consolidation period, and a lot of this wave of rise is due to Trump’s Driven by factors, these bullish effects have now been reflected, and it is expected that the market will not be very big in the future, so frequent operations are likely to do more and make more mistakes. Slowly increasing the spot position will lead to a better mentality or profit in the end.
Solana buying is relatively solid
Solana has still maintained a very good performance during this wave of shocks, and its relative exchange rates with Bitcoin and Ethereum have also maintained a stable trend. It is worth mentioning that the cryptocurrency market fell into panic on Monday due to Jump Trading's large-scale selling of Ethereum. BitMEX co-founder Arthur Hayes claimed that rumors that "big institutions may fall" further intensified market concerns.
As we all know, the Solana ecosystem is the main investment target of Jump Trading, so SOL must account for a considerable proportion of its holdings. Even though Jump Trading itself has not sold SOL, such rumors can still easily trigger panic selling of SOL tokens in the market. However, from the perspective of price performance, although SOL’s currency price has fallen, the magnitude is not as large as expected. At the same time, the magnitude of the rebound is greater than that of most altcoins. This may mean that there are many buyers lurking in the market at low prices. price range, take advantage of this correction to acquire SOL.
However, given that this wave of rebound is relatively strong, we do not think that the current price will be a good choice. Investors who want to open or increase positions are recommended to wait patiently for the next wave of callbacks. The target buying price can be Set at around US$120~130.
Binance Copying Analysis
GTRadar – BULL
Copy link GTRadar – Balanced
Copy link GTRadar – Potential public chain OKX
Follow the link
The yields of "GTRadar - BULL", "GTRadar - Balanced" and "GTRadar - Potential Public Chain OKX" in the past 7 days were -14.51%, +6.14% and +2.25% respectively, and the yields in the past 30 days were - 26.18%, -0.1% and +5%.
In the past week, the maximum decline of BTC reached 24%, and ETH also suffered a decline of 36%. It was a black swan level collapse. Bull, which was all long, suffered serious losses this month. MDD has exceeded the previous record and is currently integrating some strategies. After the replacement, Balance and the newly launched OKX public chain with potential for copying orders have been profitable in the past seven days because 30% of the short orders are hedged.
Currently "GTRadar - BULL" holds a net long position of 6% in BTC.
Currently, GTRadar - Balance holds a net short position of approximately 2%.
Currently, "GTRadar - Potential Public Chain" does not have any positions.
The long-term returns of a follower who often changes his investment portfolio are not as good as those of a follower who continues to follow a single group. Don’t end the follower easily just because of a short-term retracement. Judging from the curve, the retracement is a good time to start following. In and out, on the contrary, the yield rate will be significantly reduced.
Hot news
Tether made a net profit of US$5.2 billion in the first half of the year, and the scale of U.S. debt reserves exceeds that of many countries
Stablecoin issuer Tether released its latest quarterly report on Wednesday, showing the company's net profit hit a record $5.2 billion in the first half of 2024. On the other hand, the company’s inventory of U.S. Treasury bonds has also reached an all-time high. Tether’s U.S. Treasury bond portfolio is currently worth approximately $97.6 billion, and these figures were certified by BDO, a global independent accounting firm.
U.S. “Bitcoin Strategic Reserve” Draft Released: Plans to Buy 1 Million Bitcoins in Five Years
U.S. Senator Cynthia Lummis has drafted a bill that would include Bitcoin as a U.S. strategic reserve asset. According to draft content obtained by CoinDesk, the plan would set aside $6 billion from the net proceeds from the Federal Reserve to the Treasury Department and recalculate the value of these gold certificates at market value so that they can be used to support the Bitcoin purchase plan. funding requirements.
Fantom officially changes its name to Sonic Labs and launches EVM compatible chain Sonic at the end of the year
The blockchain network Fantom officially changed its name to Sonic Labs yesterday and will launch Sonic, an EVM-compatible chain with the fastest transaction processing speed. The new network will also come with a new native token S.
MicroStrategy's second-quarter losses exceeded expectations, and it plans to issue new shares to raise 2 billion magnesium to buy Bitcoin
MicroStrategy, a US-listed company known for its large Bitcoin reserves, announced its second-quarter financial results yesterday. The company suffered a substantial loss of US$5.74 per share and quarterly revenue of US$111.4 million. In addition, the financial report also shows that MicroStrategy intends to submit a new US$2 billion stock issuance plan, most likely to raise funds to purchase more Bitcoin.
U.S. jobs data weak, recession fears mounting
The Labor Department reported last week that nonfarm payrolls increased by 114,000 in July, missing expectations of 176,000. Meanwhile, the unemployment rate was 4.3%, higher than expected. The weak employment data intensified worries about an economic recession and sow the seeds for a global stock market plunge the following week.
Cryptocurrency market plummets, with liquidation of $800 million across the network
The cryptocurrency market fell sharply on Monday. More than 200,000 people were liquidated. The total liquidation amount exceeded US$1 billion. Bitcoin once fell below US$50,000. At the same time, the cryptocurrency arm of Jump Trading also sold Ethereum heavily during the crash, exacerbating the selling pressure and panic in the market.
Taiwanese cryptocurrency exchange Rybit announces suspension of individual user services
According to an official announcement released on August 1, Taiwan exchange Rybit announced that it will stop serving individual users starting on August 23
Provide platform services. Users need to withdraw the New Taiwan Dollar and virtual currency assets on the platform through the Rybit website or App according to normal procedures before 23:59 on August 22, 2024.
Capula, Europe’s fourth largest hedge fund, reveals 464 million Mg Bitcoin ETF holdings
Hedge fund giant Capula Investment Management held Bitcoin spot ETFs issued by BlackRock and Fidelity as of the end of the second quarter, June 30, according to a filing with the U.S. Securities and Exchange Commission (SEC) on Monday. shares, with a total value of approximately US$464 million. Capula Investment Management is a London-based company and one of the largest hedge fund managers in Europe.
After a massive sell-off of post-crypto assets, Jump Trading is suspected of cashing out more than 500 million USDC
After starting to sell Ethereum on July 24, Jump Trading withdrew 606 million USDC from Binance and deposited more than 500 million of them on the Coinbase exchange. It is speculated that these USDC may be liquidated through Coinbase at a ratio of 1:1.
Morgan Stanley will start offering Bitcoin spot ETF to accredited investors
Citing people familiar with the matter, CNBC reported that Morgan Stanley’s 15,000 financial advisors will recruit qualified clients to buy BlackRock and Fidelity’s Bitcoin spot ETFs starting on August 7. It would be the first major Wall Street investment bank to offer a Bitcoin ETF to clients.
Bank of Japan deputy governor calms market sentiment: If the market is unstable, interest rates will not be raised
According to Reuters, Bank of Japan Deputy Governor Shinichi Uchida made it clear today that he "will not implement an interest rate increase" amid instability in the financial capital market. He explained that unlike the interest rate hike process in Europe and the United States, Japan is not in a situation where "if interest rates are not raised at a certain pace, policy responses will lag behind." He said that if market instability continues, it will be necessary to maintain the current loose policy in the short term.
The above content does not constitute any financial investment advice. All data comes from GT Radar official website announcements. Each user may have slight differences due to different entry and exit prices, and past performance does not represent future performance!
Source
