Bitcoin rises as dovish stance turns to imminent rate cut
At 10 a.m. Eastern Time on Friday, August 23, Federal Reserve Chairman Powell made an important speech at the Jackson Hole Global Central Bank Annual Meeting.
**It is worth noting that Powell stated quite clearly: "The time for policy adjustment has come. The policy direction is clear, and the timing and pace of interest rate cuts will depend on subsequent data, changes in the outlook and the balance of risks."
Some analysts said that although Powell confirmed the market's widespread expectation of starting interest rate cuts in September, this speech was also "dovish", providing a certain clarity to the financial market in the short term, but did not provide many clues about how the Fed will act after the September meeting.
For example, if there is another negative employment report, whether there will be a sharp 50 basis point rate cut, and whether rate cuts will continue in the coming months. However, Powell's speech at least confirmed that the Fed's fight against inflation over the past two years is about to reach a critical turning point.
After the annual meeting, Bitcoin rose from US$61,000 to a high of US$65,000, an increase of 6.5%.
There are about 26 days until the next Federal Reserve interest rate meeting (September 19, 2024)
https://hk.investing.com/economic-calendar/interest-rate-decision-168
Market technical and sentiment environment analysis
Sentiment Analysis Components
Technical indicators
Price Trends
In the past week, BTC prices rose 8.77% and ETH prices rose 6.55%.
The above picture is the price chart of BTC in the past week.
The above picture is the price chart of ETH in the past week.
The table shows the price change rate over the past week.
Price Volume Distribution Chart (Support and Resistance)
In the past week, both BTC and ETH broke through the concentrated trading area and formed an upward trend.
The above picture shows the distribution of BTC's dense trading areas in the past week.
The above picture shows the distribution of ETH's dense trading areas in the past week.
The table shows the weekly intensive trading range of BTC and ETH in the past week.
Volume and Open Interest
In the past week, the trading volume of BTC and ETH was the largest when they rose to 8.23; the open interest of BTC and ETH both increased slightly.
The top of the above picture shows the price trend of BTC, the middle shows the trading volume, the bottom shows the open interest, the light blue is the 1-day average, and the orange is the 7-day average. The color of the K-line represents the current state, green means the price rise is supported by the trading volume, red means closing positions, yellow means slowly accumulating positions, and black means crowded state.
The top of the above picture shows the price trend of ETH, the middle is the trading volume, the bottom is the open interest, the light blue is the 1-day average, and the orange is the 7-day average. The color of the K-line represents the current state, green means the price rise is supported by the trading volume, red is closing positions, yellow is slowly accumulating positions, and black is crowded.
Historical Volatility vs. Implied Volatility
In the past week, the historical volatility of BTC and ETH was highest when they fluctuated in a wide range of 8.20; the implied volatility of BTC increased while that of ETH decreased.
The yellow line is the historical volatility, the blue line is the implied volatility, and the red dot is its 7-day average.
Event-driven
This past week, the Federal Reserve’s annual meeting hinted at an upcoming rate cut, and Bitcoin rose 6.5% in response.
Sentiment Indicators
Momentum Sentiment
In the past week, among Bitcoin/Gold/Nasdaq/Hang Seng Index/CSI 300, Bitcoin was the strongest, while CSI 300 performed the worst.
The above picture shows the trend of different assets in the past week.
Lending Rate_Lending Sentiment
The average annualized return on USD lending over the past week was 6.6%, and short-term interest rates rose to 10.1%.
The yellow line is the highest price of USD interest rate, the blue line is 75% of the highest price, and the red line is the 7-day average of 75% of the highest price.
The table shows the average returns of USD interest rates at different holding days in the past
Funding Rate_Contract Leverage Sentiment
The average annualized return on BTC fees in the past week was -1.4%, and contract leverage sentiment is turning pessimistic.
The blue line is the funding rate of BTC on Binance, and the red line is its 7-day average
The table shows the average return of BTC fees for different holding days in the past.
Market Correlation_Consensus Sentiment
The correlation among the 129 coins selected in the past week was around 0.85, and the consistency between different varieties has increased from a low level.
In the above picture, the blue line is the price of Bitcoin, and the green line is ['1000 floki', '1000 lunc', '1000 pepe', '1000 shib', '100 0x ec', '1inch', 'aave', 'ada', 'agix', 'algo', 'ankr', 'ant', 'ape', 'apt', 'arb', 'ar', 'astr', 'atom', 'audio', 'avax', 'axs', 'bal', 'band', 'bat', 'bch', 'bigtime', 'blur', 'bnb', 'btc', 'celo', 'cfx', 'chz', 'ckb', 'comp', 'crv', 'cvx', 'cyber', 'dash', 'doge', 'dot', 'dydx', 'egld', 'enj', 'ens', 'eos','etc', 'eth', 'fet', 'fil', 'flow', 'ftm', 'fxs', 'gala', 'gmt', 'gmx', 'grt', 'hbar', 'hot', 'icp', 'icx ', 'imx', 'inj', 'iost', 'iotx', 'jasmy', 'kava', 'klay', 'ksm', 'ldo', 'link', 'loom', 'lpt', 'lqty', 'lrc', 'ltc', 'luna 2', 'magic', 'mana', 'matic', 'meme', 'mina', 'mkr', 'near', 'neo', 'ocean', 'one', 'ont', 'op', 'pendle', 'qnt', 'qtum', 'rndr', 'rose', 'rune', 'rvn', 'sand', 'sei', 'sfp', 'skl', 'snx' , 'sol', 'ssv', 'stg', 'storj', 'stx', 'sui', 'sushi', 'sxp', 'theta', 'tia', 'trx', 't', 'uma', 'uni', 'vet', 'waves', 'wld', 'woo', 'xem', 'xlm', 'xmr', 'xrp', 'xtz', 'yfi', 'zec', 'zen', 'zil', 'zrx'] overall correlation
Market Breadth_Overall Sentiment
Among the 129 coins selected in the past week, 89% of them were priced above the 30-day moving average, 75% of them were above the 30-day moving average relative to BTC, 66% of them were more than 20% away from the lowest price in the past 30 days, and 48% of them were less than 10% away from the highest price in the past 30 days. The market breadth indicator in the past week showed that most coins in the overall market returned to an upward trend.
The picture above is ['bnb', 'btc', 'sol', 'eth', '1000 floki', '1000 lunc', '1000 pepe', '1000 sats', '1000 shib', '100 0x ec', '1inch', 'aave', 'ada', 'agix', 'ai', 'algo', 'alt', 'ankr', 'ape', 'apt', 'arb', 'ar', 'astr', 'atom', 'avax', 'axs', 'bal', 'band', 'bat', 'bch', 'bigtime', 'blur', 'cake', 'celo', 'cfx', 'chz', 'ckb', 'comp', 'crv', 'cvx', 'cyber', 'dash', 'doge', 'dot', 'dydx', 'egld', 'enj', 'ens', 'eos','etc', 'fet', 'fil', 'flow', 'ftm', 'fxs', 'gala', 'gmt', 'gmx', 'grt', 'hbar', 'hot ', 'icp', 'icx', 'idu', 'imx', 'inj', 'iost', 'iotx', 'jasmy', 'jto', 'jup', 'kava', 'klay', 'ksm', 'ldo', 'link', 'loom', 'lpt', 'lqty', 'lrc', 'ltc', 'luna 2', 'magic', 'mana', 'manta', 'mask', 'matic', 'meme', 'mina', 'mkr', 'near', 'neo', 'nfp', 'ocean', 'one', 'ont', 'op', 'ordi', 'pendle', 'pyth', 'qnt', ' qtum', 'rndr', 'robin', 'rose', 'rune', 'rvn', 'sand', 'sei', 'sfp', 'skl', 'snx', 'ssv', 'stg', 'storj', 'stx', 'sui', 'sushi', 'sxp', 'theta', 'tia', 'trx', 't', 'uma', 'uni', 'vet', 'waves', 'wif', 'wld', 'woo','xai', 'xem', 'xlm', 'xmr', 'xrp', 'xtz', 'yfi', 'zec', 'zen', 'zil', 'zrx' ] 30-day proportion of each width indicator
Summarize
In the past week, the price of Bitcoin (BTC) and Ethereum (ETH) fluctuated and then rose. The historical volatility peaked on August 20 when the market fluctuated widely, and the trading volume peaked on August 23 when the market rose. The open interest of both BTC and ETH increased. The implied volatility of BTC increased while that of ETH decreased. Bitcoin performed the best in comparison with gold, Nasdaq, Hang Seng Index and CSI 300, while CSI 300 performed the weakest. Bitcoin's funding rate fell to negative, reflecting the pessimistic sentiment of market participants. The correlation between the selected 129 currencies remained at around 0.85, showing that the consistency between different varieties has risen from a low level. The market breadth indicator shows that most cryptocurrencies in the overall market are still back to an upward trend. The Federal Reserve's annual meeting hinted at an upcoming rate cut, and Bitcoin rose 6.5% in response.
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