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Bitcoin may continue to fluctuate widely before the rate cut, and Wednesday's CPI data is worth paying attention to

BlockBeatsBlockBeats2024/08/12 10:20
By:BlockBeats

Although expectations of a U.S. recession have eased in the near term, macroeconomic and geopolitical risks remain and investors should remain cautious.

Original source: Frontier Lab Chinese


BTC and ETH overview this week


Market performance



This week, the overall cryptocurrency market showed a "violent turbulence" trend:


· Bitcoin:Affected by the decline in the global market, Bitcoin fell sharply on Monday, but with the release of macro data on Tuesday, market sentiment improved and Bitcoin prices rebounded.


· Ethereum:Also fell rapidly on Monday due to the market crash, and the serial liquidation incident further exacerbated the decline. Although it rebounded later, the amplitude was small.


Key Events


US economic recession triggers global market plunge


· On Monday, the Japanese stock market plummeted and triggered the circuit breaker mechanism, followed by a full-line decline in the three major US stock indexes, with the SP 500 index reaching a low of 5,119 points, the Dow Jones index falling to 38,499 points, and the Nasdaq index falling to 15,708 points.


· The market reacted strongly to the lower-than-expected US employment data, triggering concerns about economic recession, leading to risk aversion and panic selling. However, with the release of other macro data in the middle of the week, the market gradually recovered and began to rebound.


U.S. Macro Data


· The U.S. ISM non-manufacturing PMI in July reached 51.4, exceeding expectations. The number of people applying for unemployment benefits in early August fell to 233,000. These data eased the market's concerns about economic recession and prompted the market to gradually recover.


Increased uncertainty in geopolitical wars


· After the supreme leader of Hamas was attacked in Iran last week, Iran threatened to retaliate against Israel. Although the action has not yet been implemented, the uncertainty of the situation in the Middle East has increased market concerns and put pressure on the global market.


The Democratic Party of the United States has determined its candidates


· After Biden announced that he would no longer run for election, the Democratic Party nominated current Vice President Harris as the presidential candidate. Harris had initial contact with executives in the cryptocurrency industry. Although he did not make a clear statement, the market has new expectations for the Democratic Party's future cryptocurrency policy.


Altcoin Overview of the Week


Overall Performance



Market sentiment rebounded to 9.2% this week, but it is still in the extreme fear zone, a significant decrease from 12% last week. This change in sentiment is mainly due to the fact that the US employment data last Friday was far below expectations, which triggered market concerns about a future recession, leading to risk aversion and panic selling on Monday this week. Global markets fell sharply, and Altcoins generally fell by more than 20%. With the release of other macro data, recession concerns have eased and the market has begun to rebound. However, the rebound of most tokens is not as large as the market, reflecting that investors remain cautious and take a wait-and-see attitude towards Altcoins.


Overview of the Gainer List


The top 5 tokens with the highest gain in the past week (excluding tokens with too small trading volume and meme coins), data source: Coinmarketcap



The gainer list did not show the characteristics of "sector concentration", and the rising tokens were scattered in various sectors, belonging to DEX, Depin, L1s, wallets and privacy tracks respectively, and the market is still in a rebound.


Meme Token Gainer List


Data source: coinmarketcap.com


After the market plunge on Monday this week, the decline in the Meme track was particularly severe, with all projects falling by more than 30%. Although the Meme token rebounded with the market after Tuesday and was stronger than other tracks, the increase in the Meme token was not significantly outstanding.


It is worth noting that the speed of renewal of the Meme theme has accelerated. Although this superficially shows its vitality and potential, it also exposes its instability and high replacement rate, which may lead to insufficient confidence among long-term investors, thus posing a challenge to the continued growth of the track.


Social Media Hotspots


Based on the data of the top five daily growth in LunarCrush and the top five AI scores in Scopechat, the statistics for this week (8.3-8.9) are as follows:


The theme with the most appearances is L1s, and the tokens on the list are as follows(tokens and meme coins with too small trading volume are not included):


Data source: lunarcrush and Scopechat


As can be seen from the above table, the L1s track projects that social media followed this week rose and fell by different degrees. Although some tokens rebounded after a sharp drop, if the rebound strength is lower than the market and there is no special event, this may reflect the weak power of the funds behind it.


Theme tracking


Data · Source: SoSo Value


According to weekly returns, the Payment track performed best, while the RWA track performed the worst.


· Payment track: XRP is the main force of this track, accounting for 68.01% of the market value. This week, Ripple won the lawsuit against the SEC. The court ruled that the sale of XRP did not violate federal securities laws, and the amount of the fine was also lower than expected. This positive news promoted a strong rebound in XRP, driving the entire Payment track to perform well this week.


· RWA track: Affected by the expectation of a US economic recession, the stock market and bond market yields fell this week, resulting in the RWA track, which mainly connects to real assets, rebounding the least and performing relatively poorly.


Preview of major Crypto events next week


· Tuesday (August 13) FireNow: Asian Web 3.0 Institutional Summit


· Wednesday (August 14) U.S. July seasonally adjusted CPI annual rate; Istanbul Blockchain Week 2024


· Thursday (August 15) U.S. July retail sales monthly rate


· Friday (August 16) OnChain Summit; ETHShenzhen 2024 Summit and Hackathon


Outlook for next week


1. Bitcoin: Although expectations of a U.S. recession have eased in the near term, macroeconomic and geopolitical risks remain. It is expected that Bitcoin will continue to fluctuate widely before the Fed cuts interest rates. Investors should remain cautious, but they can keep an eye out for rebound opportunities.


2. Ethereum:Ethereum spot ETF funds continue to flow in. Although there are bargain hunting opportunities in the short term, long-term risks remain. Ethereum is expected to fluctuate in tandem with Bitcoin, and investors should be cautiously bullish.


3. Altcoin:After the plunge this week, Altcoin is expected to rebound, but the gains may be limited. Investors should remain cautious and pay attention to market changes.


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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