After the release of the US non-farm data yesterday, both the US stock market and the crypto market saw a wave of declines.
Bitcoin's lowest point reached $52,500 and is currently fluctuating around $54,000. Ethereum's lowest point reached $2,150 and is currently fluctuating around $2,230.
The overall decline in Altcoin was around 5%.
The news worth noting is:
1. According to the latest data, the United States added 142,000 jobs in August, and the market had expected an increase of 160,000
Although the data was not as expected, there were no serious problems and it was even better than the data in July.
At the same time, the unemployment rate has fallen, which means that the United States is not at risk of entering a recession for the time being.
Why are US stocks and Bitcoin falling despite good non-farm data?
In fact, not only are U.S. stocks and Bitcoin falling, but U.S. Treasury bonds are also falling, especially 1-year, 2-year, and 3-year Treasury bonds, which have fallen by more than 2%.
At the same time, the US dollar index is rising, and gold and oil are falling. These data reflect a phenomenon: the market is avoiding risks.
Investors have become more cautious and concerned about market risks, so they are pulling money out of stocks, cryptocurrencies and even gold and buying safer assets like U.S. Treasuries.
The yield on U.S. Treasury bonds is not bad now, with the one-year yield reaching more than 4%.
Will the Fed cut rates by 25 basis points or 50 basis points?
The recent non-farm payrolls data supports the Fed’s decision to cut interest rates. It is expected that the Fed will cut interest rates by 25 basis points on September 18.
However, the U.S. labor market is not optimistic, and a 25 basis point rate cut may not be enough to solve the problem.
If the rate cut is increased to 50 basis points, the market will worry whether this means an economic recession is coming. Therefore, the Fed is not willing to make a larger rate cut easily.
Why are investors so pessimistic?
Because in the history of the United States, every interest rate cut is usually accompanied by a decline in the stock market. Investors are worried that interest rate cuts will bring more market risks, so they choose to withdraw from the market and no longer distinguish which assets are safe and which are risky. Although the market may still perform well if the economy does not decline in the early stage of interest rate cuts, investors would rather run first. In addition, the U.S. stock market is currently fluctuating at a high level. As a leading company in the field of AI, Nvidia has good financial performance, but the market has too high expectations for it, causing its stock price to fall. This has shaken investors' confidence in AI and even caused some panic. Because AI stocks have risen too much before, people are now beginning to worry that their valuations are too high, leading to an overall decline in technology stocks. Bitcoin and Ethereum are also considered part of technology stocks, so it is normal for them to fall along with technology stocks.
So overall, this decline is mainly due to investors' risk aversion. Whenever the US market opens, selling pressure will increase, which can also be seen in the data of spot ETFs. 2. Bitcoin falls, but long-term holders remain strong. Although the price of Bitcoin is falling, long-term holders have not shown panic and still choose to continue holding.
In recent days, the selling has been mainly from short-term holders, and the number of active Bitcoins in the short term has also decreased. From the data transferred to the exchange, it can be seen that whenever the price falls, the selling pressure will be greatly reduced. This shows that more and more investors are unwilling to sell Bitcoin at low prices.
However, this does not mean that the price of Bitcoin will not continue to fall. The liquidity and purchasing power of the market are very poor now, and even if only a small amount of Bitcoin is sold, it may cause the price to fall. The next two days are weekends, and the market liquidity will be even worse. If panic spreads, there may be a bigger drop.
3. The Ethereum Foundation may sell 1,000 Ethereum
According to Lookonchain’s monitoring, the Ethereum Foundation transferred 1,000 Ethereum to a multi-signature wallet address starting with 0xbC9a.
According to past transaction records, this multi-signature wallet usually transfers Ethereum to another wallet address starting with 0xd779, and then converts the Ethereum into DAI.
This could mean that the Ethereum Foundation is preparing to sell off these ethers.
4. Trump promises to support future industries such as cryptocurrency and artificial intelligence
In his speech at the Economic Club of New York, Trump said that if he is re-elected as US president, he will strongly support future industries such as cryptocurrency and artificial intelligence.
He also promised to make the United States the global center for cryptocurrency and Bitcoin. He said: We will not fight these future industries, but embrace them.
In addition, Trump also mentioned that he would listen to Musk's advice and set up a special committee to examine government spending, find waste, and improve government efficiency. Musk has agreed to serve as the leader of the committee.
According to data from the forecasting website Polymarket, Trump's probability of being re-elected as US president in 2024 has risen to 53%. In contrast, the probability of the current Vice President Kamala Harris's election has dropped to 46%.
5. Pavel Durov said: If the country is dissatisfied with Telegram, it should sue the platform instead of the CEO
Telegram founder Pavel Durov said that if a country is dissatisfied with a social platform like Telegram, it should sue the platform itself rather than targeting individuals.
In his first speech on Telegram since his arrest in France, Pavel Durov said Telegram is ready to exit markets in countries that do not respect its privacy and security principles.
Durov mentioned that Telegram has already taken similar actions in some countries, such as Russia and Iran. Durov was arrested at a Paris airport last month on charges that he facilitated crimes such as the distribution of child pornography and drug trafficking.
However, he has now been released by the French authorities, but still needs to be under judicial supervision and remain in France for the time being.
6. CZ may never be able to take on a leadership role at Binance again
Richard Teng, the current CEO of Binance, said that after Binance's founder CZ left Binance, he was actually banned for life, which means that he may never be able to hold any leadership position in Binance again.
Previously, an Axios report also mentioned that CZ has been banned from holding a leadership position in Binance. Although he may have a chance to return in the future in theory, the possibility is very small. Now it seems that the situation is clearer: CZ's lifetime ban is an important condition for Binance to reach a settlement with the US Department of Justice. In addition, Binance was required to pay a fine of more than $4 billion. In general, the US stock market and the crypto market are now affected by the market's risk aversion sentiment, and the short-term ups and downs will be relatively large.
At this time, it is recommended to watch more and do less, mainly hold spot goods, and do not touch contract transactions. Next, you can focus on the US presidential debate on September 10, the release of the US August CPI data on September 11, and the Federal Reserve's interest rate meeting on September 18. This will affect the short-term market sentiment. For more information, please join the QQ group: 580869654
