Bitcoin big players have already fled, and short-term decline has become the main theme
The market suffered a sharp decline after a brief rebound. The price of BTC fell from $57,000 to below $53,000, hitting a new low on August 5. The market showed a trend of falling below $50,000, which is related to the market's response to the Fed's expectations of rate cuts.
Non-farm payrolls increased by 142,000 in August, and the unemployment rate fell to 4.2%, slightly lower than expected, while the speech of Fed Governor Waller strengthened the expectation of rate cuts. The market has different views on the extent of the rate cut, believing that a small rate cut is good for risky assets, while a large rate cut may reflect concerns about a recession.
Weak US manufacturing PMI data and uncertainty are expected to drive down risky assets, including cryptocurrencies. Rate cuts may not guarantee a rise in BTC prices, especially when protocol revenues fall, which indicates reduced usage. Nearly $50 million in liquidations in the crypto derivatives market in one hour show that leveraged traders were caught off guard by volatility. Major U.S. stock indexes fell, with the Nasdaq down 2.5% and the S&P 500 down 1.6%, reflecting market concerns about the economic outlook.
On September 5, BTC spot ETFs saw a net outflow of $211 million, with withdrawals for seven consecutive days. Fidelity Wise Origin BTC Fund and Grayscale BTC Trust suffered the most losses. Ethereum spot ETFs also reported net outflows, with Grayscale Ethereum Trust outflows of $7.3895 million. The supply peak for short-term holders in April 2024 is similar to the historical bull market end pattern, while long-term holders or large holders have begun selling in March, limiting demand and causing price consolidation.
I believe that the market will continue to fluctuate and wash down, and BTC is likely to fall below $50,000 in the short term, but in the long run, the crypto market is mature and it is expected to break $100,000 in the future.