The CPI data will be released tonight. If it is lower than expected, it is a big positive.
Higher than expected is also a positive, because this data only determines: whether the interest rate will be cut by 50 basis points or 25 basis points
The data released by the United States last week were not very good, reflecting the sluggish manufacturing industry in the United States. The U.S. stock market also fell, and many large technology stocks fell by more than 10%. This made many people look forward to the early arrival of interest rate cuts.
The data was released at 20:30 in the evening. The market currently has great differences in expectations about the extent of the Fed's interest rate cut this month. The release of the US CPI data in August will guide the market to adjust its expectations of the Fed's interest rate cut. The short-term market will inevitably fluctuate greatly.
Is the current market bullish or bearish?
IPOR Stablecoin Index: Data shows that on-chain leverage has dissipated and lending rates have returned to pre-2023 levels. During the airdrop farming period, lending rates soared, but farmers closed their circular positions due to poor airdrop results.
BTC Open Interest: BTC open interest shows that leverage has also reset. Funding rates were higher in March but turned negative in April and July/August, meaning shorts paid longs, indicating that traders expected a fall in the market. However, currently open interest (OI) is positive again.
Miner selling: Another bullish indicator is the selling behavior of miners. Miners seem to have stopped selling and have started accumulating BTC again.
Stablecoin Supply: The continued growth in stablecoin supply is perhaps a more bullish chart.
The total supply is rising, but the difference is that USDT supply has increased while USDC has shrunk from $55 billion to $34 billion. Why?
First, the Silicon Valley Bank collapse caused USDC to decouple, marking the apex of USDC supply. Another possible explanation is that US policies proposed by Nic Carter pushed investors into less regulated offshore stablecoins, so USDC growth stagnated while USDT continued to expand.
If that’s the case, crypto-friendly US regulation could be a bullish catalyst for USDC to rise… oh wait…
Regulatory situation: In 2024, the US SEC collected $4.7 billion in fines from crypto companies, a 30-fold increase from 2023.
So is there still a bull market for Ethereum?
First of all: funds have not yet benefited Ethereum. It is in a cycle of interest rate hikes, and funds will only be in the traditional financial market. Ethereum has not yet reached a status that traditional funds are flocking to, and Bitcoin's ETF funds have also entered a period of shrinkage after experiencing a period of explosive growth.
Secondly: This round of Ethereum lacks new narratives, and there are no projects that can drive on-chain activity. A bunch of fragmented L2s cannot drive Ethereum, while the previous round of NFTs, defi, and chain games all made Ethereum full of vitality.
Finally: Although the market is criticizing Ethereum, big investors still hold a large amount of Ethereum and are long on Ethereum. Especially after it came out for staking, a large amount of Ethereum was pledged and then produced at zero cost, continuing to dump the market.
There is another point that Ethereum has, that is, like Bitcoin, it has passed the spot ETF. This point will still explode in the future. Combined with the increase in liquidity due to interest rate cuts, funds will slowly benefit Ethereum, and the bull market of Ethereum is not far away.
