The Japanese stock market fell more than 3% at the opening on Monday, and then the Shanghai Composite Index fell nearly 1%, which made traders feel that the decline of Japanese stocks was not an isolated case, laying the groundwork for this week's turmoil. However, gold and silver opened surprisingly quietly, as if a large fluctuation was brewing.
1. After the release of non-farm data last Friday, the Federal Reserve did not clearly announce the extent of the first interest rate cut, and the market is still in a period of volatility with a lack of consensus - this means that the market can move in any direction without logic, leading to disorderly turbulence.
This week, there are many risk events, and turbulence is inevitable
The most concerned is the August CPI data to be released on Wednesday . They believe that this data will determine how many basis points the Fed will cut interest rates at the September meeting, so this is a data that can cause a stir in the market. However, from the perspective of market expectations, there will be no substantial changes in inflation data in the short term. If the data meets market expectations, it will still be difficult for traders to judge the extent of the Fed's first rate cut. It can be used as a reason for a 25 basis point rate cut or a 50 basis point rate cut.
The European Central Bank is almost certain to announce a 25 basis point rate cut , but this news has been fully digested by the market. What Wall Street really cares about is whether the central bank will reveal clues about further rate cuts.
But in our view, the first televised debate between Trump and Harris this week is the most noteworthy, which will determine the short-term trend of the market. If Trump has the upper hand, then a new "Trump trade" will sweep in. Otherwise, the "Trump trade" will suffer a larger liquidation.
In addition, Shenyu said that the bear market will last for 16 to 19 months . Almost everyone is pessimistic about the market outlook. In comparison, I remain cautiously optimistic about the market outlook:
1. Almost everyone believes that the US stock market will definitely collapse after the rate cut, so it is highly likely that it will not collapse (unless a black swan event such as a Sino-US war or a nuclear war occurs). BTC is likely to fluctuate widely in the range of 50,000-70,000, occasionally inserting a needle downward.
2. At present, the entire market is indeed in a stock game , but the final result of the game has a relatively clear direction. The narrative is basically left with BTC ecology, meme, and AI. The bigger trend is that more and more project parties choose to "go to the exchange" to launch projects on the chain. These two points will improve the current dispersion of hot money and reduce the difficulty of creating wealth hotspots.
3. Compared with some OGs in Po County who only know how to open Texas Hold'em and cut leeks, OGs in North America and the mainland are still contributing to breaking the circle of the industry. Take Shenzhen as an example. Some OGs who entered the circle from 2012 to 2017 have entered the real industry in large numbers in the past two years and have become core figures in the top circles of traditional industries. This soft link + muscle show model has actually improved the views of many domestic bigwigs on the crypto. I dare not say that funds outside the circle will enter the crypto, but the possibility of allocating BTC is increasing.
6 reasons why the Altcoin market is weak
1. On the surface, the reason why Altcoin cannot take off is that the speed of new funds entering the crypto cannot keep up with the speed at which market makers and exchanges make money. Most ordinary users have a three-month liquidation period for contracts. After retail investors’ positions are liquidated, their funds are taken away by institutions and exchanges.
2. The trading technology of ordinary users is still based on various K-lines and indicators. This technology is equivalent to the stock era of 1995 and is very backward. Institutions have evolved to order book technology. This is a new technology developed in 2014, which beats the K-line school 20 years ago. It is equivalent to driving a bomber to fight cavalry, so in contract trading, ordinary retail investors usually survive for about three months.
3. Regarding the spot market in the crypto, the liquidity is very poor, and institutional traders even directly control the liquidity of certain coins . The reason for this situation is: CZ was controlled. When CZ was controlled, it was revealed in the United States that more than 200 market makers were related to CZ. With the control of CZ, the cohesion of the market-making institutions related to CZ was broken. Without a soul figure like CZ to organize 200 market-making institutions to jointly make the market, the market's "ability to make trouble" cannot be exerted. In layman's terms, the institutions that were originally capable of making trouble in the bull market were divided because of the incident with CZ, and they could not gather together to form a joint force to make trouble and create hot spots. This led to insufficient market heat, which indirectly led to insufficient new customer attraction. Further leading to weak liquidity.
4. The approval of ETFs has resulted in new funds that were originally intended to enter the crypto being deposited in the U.S. stock market
5. The crypto lacks innovation at the grand narrative level, and the crypto track has also been siphoned away by AI as a source of developers and traffic.
6. The listing fees of some exchanges are too high. Many project parties and VCs actually do not make money. Many project parties cannot earn back the listing fees even if they pay for listing, and retail investors also lose money.
In short, those who work in VC agencies said that many VC agencies have closed down, especially Chinese VC agencies, which are in a disadvantageous position in global competition. High-quality projects cannot be invested, and second-rate projects are locked up for several years and even break even.
In VC's observation, the weakness of the crypto market is mainly due to the weakening of liquidity and the weakening ability to attract liquidity.
If we want to change the current situation, we have to wait until the Federal Reserve releases liquidity before things can get better.
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