The overall cryptocurrency market showed a volatile trend this week:

Bitcoin: This week, Bitcoin did not follow the rise of risk markets such as the U.S. stock market. Instead, it went on its own downward trend. The main reason for the decline was that the liquidity of the market was very weak last weekend, and the BTC address of Mtgox moved again this week, which led the market to believe that Mtgox was about to prepare for the final compensation, thus triggering the market's decline.

Ethereum: Ethereum also followed the market in a downward trend this week, and did not have its own independent trend, but the decline was stronger than Bitcoin. From the perspective of spot ETFs, there is still capital outflow, which means that most investors are not very interested in investing in Ethereum at this stage.

A few things to focus on

The magnitude of the Fed’s rate cut in September

The market has fully priced in the Fed's interest rate cuts starting in September. The discussion now is whether the rate will be cut by 25 BP or 50 BP. Based on the economic data released by the United States this week, the market believes that the probability of a 25 BP cut is higher, which is a conservative defensive rate cut.

US Macro Data

The US one-year inflation forecast of 2.97% announced on Monday was lower than market expectations, which led the market to increase the probability of a 50 basis point rate cut in September. On Wednesday, the US seasonally adjusted CPI for the end of July was 2.9% and the core CPI was 3.2%. The number of initial unemployment claims announced on Thursday was 227,000, lower than expected and the previous value, which shows that the US economy is not as bad as the market expected and is still resilient, reducing the market's expectations for the Fed to cut interest rates by 50 basis points in September.

Geopolitical war uncertainty increases

This week, Ukraine continued to intensify its attacks on Russia's Kursk Oblast and launched an attack on the Zaporizhia Nuclear Power Plant, even igniting one of its cooling towers on Monday night, posing a risk of leakage at the Zaporizhia Nuclear Power Plant, thus exacerbating the uncertainty of the Russia-Ukraine war.

Mtgox addresses continue to move

On Wednesday, a BTC transfer worth $2 billion occurred at the Mtgox address, which led the market to believe that this was a test before Mtgox continued to pay out compensation. Mtgox may soon pay out the last BTC, paying out all the more than 40,000 BTC on the address, which triggered a market decline. But from another perspective, the Mtgox risk that has been buried for 10 years is about to end.

Current Air Force main force:

(1) BTC worth more than $2 billion in Mt. Gox, a total of 33,105 BTC, has been released and is being sold off gradually

In addition to this batch, there are more than 60,000 BTC that have not moved, which is further air force

(2) The more than 10,000 BTC that the US government just transferred may be being sold

(3) Conflict between Iran and Israel, war between Russia and Ukraine

The current main forces of the multi-army:

(1) The Fed’s interest rate cut policy: Powell will make a speech next week. The first interest rate cut may be in September. There will be three interest rate cuts this year.

(2) Trump, who may be elected as the next US president

Rival Harris’ attitude towards cryptocurrency is still unclear, and everyone is still guessing

(3) Traditional capital inflows from ETFs

The Air Force currently has an advantage, and it may take about a month to digest it.

After the air force performance is over, the multi-army can start the counterattack

How to view the recent market

Bitcoin: With the release of more macro data this week, expectations for a U.S. recession have eased somewhat, and analysts are beginning to expect the Fed to cut interest rates by 25BP in September, negating previous speculation of an early rate cut. However, due to global geopolitical instability and disagreements over the extent of future rate cuts, Bitcoin is expected to continue to fluctuate widely before the Fed cuts interest rates.

Ethereum: There has been a continuous outflow of funds from the Ethereum spot ETF this week, indicating that Ethereum is not very attractive at its current price, so it will not break out of its own trend. It is expected to remain strongly correlated with Bitcoin and fluctuate widely.

Altcoins: Although Altcoins were stronger than the market this week and made up for the gains from last week, there has not been a lot of capital flowing into Crypto in the near future, so Altcoins lack the momentum for sustained growth. It is expected that this rebound may end next week and fluctuate at the same frequency as the market.

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