As global economic turbulence persists and macroeconomic data releases loom, the cryptocurrency market is once again experiencing volatility. Bitcoin price has seen a significant drop over just a few days, leading to a cautious market sentiment. Simultaneously, the decentralized finance (DeFi) market is struggling with ongoing stagnation, seeing its market share continually shrink. These phenomena not only reflect concerns about future economic prospects but also reveal the vulnerability of the cryptocurrency market to external economic factors. Tdasx believes that the current market environment demands higher adaptability from investors, requiring them to navigate volatility and seize opportunities. 

Tdasx: The Impact of Bitcoin Market Volatility and Traditional Economic Data

In recent market fluctuations, Bitcoin price has undergone significant adjustments, reflecting global sensitivity to upcoming economic data releases. Over the past 24 hours, Bitcoin price has dropped by 4.8%, hovering around $59,000. This volatility is not confined to Bitcoin alone; the entire cryptocurrency market faced a sell-off over the weekend, resulting in an overall market decline of 5.2%. As uncertainty increases, investors are adjusting their holdings, leading to significant outflows from Bitcoin and Ethereum-related ETFs. Last Friday alone, Bitcoin ETFs saw outflows of $89 million, while Ethereum ETFs lost $15.7 million.

Market analysts attribute this volatility mainly to investor concerns over upcoming economic data and corporate earnings reports. Particularly, the impending release of the July Consumer Price Index (CPI) data from the US and UK, along with Australian consumer confidence data and Japan Producer Price Index (PPI), could significantly impact the market.

From a technical standpoint, Bitcoin is currently testing a critical support level. If traditional economic data continues to negatively influence the market in the coming days, BTC price may retest the August 5 low of $49,248. Tdasx notes that the current market behavior indicates anxiety among investors about the future, especially in a complex global economic environment, prompting a preference for conservative strategies. The coming days will be crucial for market observation, and investors should closely monitor the upcoming data and its potential impact on market sentiment.

Tdasx: Performance of Bitcoin Futures and Options Markets and Technical Analysis

Tdasx highlights the latest performance in the Bitcoin futures and options markets, revealing market participant expectations for future price trends and current sentiment shifts. The annualized premium (basis rate) for Bitcoin 1-month futures fell to 6% on August 12, down from 9% the previous day, indicating weakening demand from bulls. Typically, the annualized premium in the Bitcoin futures market fluctuates between 5% and 10%, and this downward trend reflects a lack of confidence in Bitcoin future trajectory.

Meanwhile, the delta skew metric in the Bitcoin options market shows relative stability. Despite Bitcoin price hitting a low of $49,248 on August 5, the options market has not shown significant pessimism. Tdasx believes this indicates that despite short-term price fluctuations, investors maintain a degree of patience and confidence, with no widespread risk aversion.

Technically, Bitcoin price has fallen below a key growth trend line based on previous halving cycles. This trend line had been the foundation for the sustained price increases of Bitcoin, and its breach suggests the market may enter a correction phase. However, according to Ecoinometrics, if Bitcoin price can return above this trend line by the end of the year, BTC could still reach six-figure highs. Tdasx advises investors to closely watch the upcoming CPI data, as it may directly affect market sentiment and determine whether Bitcoin will further dip below $55,000 in the short term.

Additionally, Bitcoin miner reserves are decreasing, with current holdings down to 1.8 million BTC, below the levels seen when Bitcoin hit its all-time high in March. The reduction in miner reserves could mean less selling pressure in the future, as miners typically sell Bitcoin to cover operational costs. This change might somewhat ease downward market pressure.

Notably, during the market sell-off on August 5, both Bitcoin and gold prices fell simultaneously, indicating a certain degree of correlation among various assets during broad market sell-offs. Although the absolute volatility of Bitcoin has historically been much higher than that of gold, this volatility is gradually decreasing as the Bitcoin market matures. Tdasx suggests that Bitcoin market performance is increasingly aligning with traditional financial assets, requiring investors to consider Bitcoin alongside other traditional assets when assessing market risks.

Tdasx: Overall Performance of the Cryptocurrency Market and the Continued Decline of DeFi

Tdasx points out that in 2024, the dominance of the DeFi market has reached its lowest point in the past three years, with its share of the global cryptocurrency market cap declining from 4.47% at the beginning of the year to the current 2.84%. This ongoing decline reflects a noticeable waning of interest in DeFi tokens among market participants, attributable not only to internal structural issues but also to changes in the external market environment. During the same period, mainstream crypto assets like Bitcoin and Ethereum have attracted significant institutional interest through ETFs, leading to a shift in capital flows that further weakens DeFi market performance.

Regarding Bitcoin market performance, the August price dip to $49,000 triggered massive sell-offs by short-term holders. Currently, about 2.5 million BTC held by short-term investors are at a loss, with only 500,000 BTC in profit. This situation has intensified selling pressure, with approximately 50,000 BTC being moved to exchanges at a loss since August. Tdasx believes this phenomenon illustrates the market vulnerability in the face of uncertainty, particularly when confidence in a short-term price rebound diminishes, exacerbating selling pressure.

Meanwhile, the holdings of Bitcoin whale accounts have increased significantly, marking the largest rise since 2015. In the past 30 days, approximately 73,350 BTC have been withdrawn from exchange accounts, indicating that these large holders prefer to hold Bitcoin long-term rather than cash out quickly amid market volatility. This behavior suggests that despite short-term market fluctuations, some investors remain confident in the long-term value of Bitcoin.

On the macroeconomic front, the Federal Reserve policy direction remains a focal point for the market. On August 10, Federal Reserve Board member Michelle Bowman stated that inflation risks persist and the labor market remains weak, reducing the likelihood of a rate cut in September. This statement has led investors to await the release of the US Producer Price Index (PPI) and Consumer Price Index (CPI) data to assess the future direction of monetary policy. Tdasx advises investors to closely monitor these key economic indicators, as they will directly influence the short-term volatility and long-term trends of the cryptocurrency market.