The currency circle is in turmoil again: Ethereum is at the US$4,000 mark, the market is calm and awaiting changes, and the Federal Reserve policy becomes the key
As the digital currency market sets off a new wave of turbulence, Ethereum once again attacks the $4,000 mark, but the market unexpectedly shows a "calm" side. The fundamental reason behind this is the lack of market liquidity, the scarcity of transfers on the Bitcoin chain, and the market willingness to buy and sell has dropped to freezing point. Bitcoin ETFs have been over-hyped, Wall Street institutions' BTC holdings have stabilized, and the issuance of stablecoins is no longer noticeable. There are various signs that the willingness of funds to purchase on a large scale has dropped significantly.
Although the Ethereum ETF has been approved, the market response to it has been muted. As the price is close to the last round of highs, the proportion of market net inflows into Ethereum ETFs is expected to be significantly lower than that of BTC. What is even more worrying is that ETF funds have not yet really flowed into the market, thus limiting the upside of Ethereum.
Currently, big funds in the market are waiting and waiting for guidance from the Federal Reserve policy. The U.S. election is approaching in November this year, and the Fed’s monetary policy adjustments in September or after the election will become the focus of market attention. Faced with debts of up to 35 trillion US dollars and rising interest rates, the Federal Reserve's decisions will directly affect the fate of financial markets. Some funds are looking forward to the arrival of the "golden pit" and seeking to buy bottoms in the market crash; while other funds are looking forward to the bull market after the Bitcoin halving and are preparing to sell at high levels.
However, judging from historical experience, the cryptocurrency market may become a reservoir for the Federal Reserve’s massive water release policy. As U.S. debt continues to accumulate, large-scale water releases have become an inevitable choice, and this will bring the threat of large-scale inflation. In this case, the crypto market is expected to become a safe haven for funds due to its unique decentralized characteristics.
To sum up, although the current market is deserted, the long-term prospects of the crypto market are still promising. Follow bloggers and publish market analysis every day to reveal the truth about the currency circle and explore high-quality potential currencies. In the ever-changing currency circle, let's explore the password of wealth together!
