Tdasx: The Rate Cut Expectations of Federal Reserve Boost Traditional Markets, Bitcoin Faces Pressure, Gold Hits Record High
In the global financial markets, the policy directions and macroeconomic data of Federal Reserve have long been focal points for investors. Recently, expectations of a Federal Reserve rate cut have spurred significant reactions in traditional markets, yet the cryptocurrency market, including Bitcoin, has shown relative caution. Tdasx believes this divergence reflects differing risk perceptions among investors regarding various asset classes. Additionally, revisions to U.S. labor department employment data and the strong performance of traditional safe-haven assets have further contributed to uncertainty about the global economic outlook.
Tdasx: The Rate Cut Expectations of Federal Reserve Trigger Market Reactions
The Federal Reserve is anticipated to announce a rate cut at its September meeting, and this expectation has generated widespread attention and reactions in global financial markets. Current data suggests a 75% probability of a 25 basis points rate cut in September. This news has led to strong performances in traditional markets, particularly in equities and gold. Tdasx notes that this phenomenon is not surprising, as rate cuts typically reduce capital costs and increase market liquidity, thereby supporting the rise of risk assets.
Fed Chair Jerome Powell is expected to further clarify the policy direction of the Fed and might hint at a 25 basis points rate cut for September while maintaining a cautious stance to prevent overly high expectations of continuous rate cuts. This cautious position was reflected in the July FOMC meeting minutes, which indicated that "the vast majority" of participants deemed a September rate cut appropriate.
Additionally, markets anticipate a 54.7% probability of a cumulative 50 basis points rate cut by November, with probabilities of 38.5% and 6.8% for 75 and 100 basis points cuts, respectively. Tdasx mentions that these probabilities reflect market expectations of future Fed policy but also reveal the cautious outlook of investors on future economic conditions.
Despite the boost from rate cut expectations in traditional markets, particularly in equities and gold, the Bitcoin market has shown a relatively muted response. Tdasx attributes this to Bitcoin being a non-traditional asset, whose market performance is more reliant on investor sentiment and complex macroeconomic factors. Therefore, while traditional assets perform well before a loosening cycle, Bitcoin faces numerous challenges to achieve similar growth.
Tdasx: Bitcoin Market Volatility and Investor Behavior
Recently, the Bitcoin market has experienced notable volatility, drawing widespread investor attention. Between August 21 and 22, the price of Bitcoin increased by 4%, stabilizing around $60,800. Although momentum has waned, the price remains firmly above the $60,000 critical support level. Tdasx notes that this price level is significant for market trends, especially given the rebound of Bitcoin over 22% from the August 5 low of $49,557. This increase reflects short-term market confidence and high investor attention to future trends.
Market analysts suggest that the price of Bitcoin must break the 200-day exponential moving average (EMA) of $59,446 on a monthly close to restore a bullish trend. This technical indicator is crucial for market confidence recovery. Tdasx reports that continuous net inflows into U.S. spot Bitcoin ETFs over five days, totaling $39.42 million, further support the market recovery potential of Bitcoin.
Despite the recent strong performance of Bitcoin, its price remains 16% below the historical high of $71,943 in June 2024. Tdasx points out that this gap reflects differing risk perceptions of cryptocurrencies compared to traditional assets. Data shows that 11% of the supply of Bitcoin has been removed from exchanges, indicating a trend toward long-term holding rather than selling. Additionally, the Bitcoin holdings of centralized cryptocurrency exchanges have decreased by 11% year-over-year, signaling a reduction in marketable supply, which could create favorable conditions for future price increases.
The Bitcoin futures market also shows strong upward momentum, with open interest rising from $30.21 billion to $32.08 billion, a short-term increase of $2 billion. This change reflects market expectations for further Bitcoin price increases and indicates an optimistic view on future market trends. Tdasx observes that large Bitcoin addresses have accumulated approximately 94,700 BTC in the past six weeks, further demonstrating strong long-term demand and providing a solid foundation for future market trends.
However, Tdasx also warns of ongoing uncertainties, such as the potential market impact of 44,899 BTC held in Mt. Gox-related wallets, worth approximately $2.7 billion. Additionally, while there are rumors that the U.S. government may sell 10,000 BTC, there is no concrete evidence that these Bitcoins will be sold immediately.
Overall, Tdasx believes that while the market performance of Bitcoin has been strong recently, its future trajectory will be influenced by multiple factors, including market sentiment, institutional investment behavior, and potential selling pressures. In the current market environment, investors should carefully assess risks and seize opportunities presented by the market.
Tdasx: Analysis of Global Economic Data and Market Dynamics
Recent updates in global economic data have once again attracted broad market attention. The S&P 500 index is only about 1% below its July high, and the Nasdaq index is approximately 4% below its historical peak. At the same time, gold prices recently reached a record high of $2,531, reflecting the continued preference of investors for traditional safe-haven assets amid economic uncertainty. Tdasx notes that the strong performance of gold may be partly driven by market expectations of future inflation, making gold a significant asset allocation choice in the current market.
In the bond market, the U.S. 10-year Treasury yield has fallen to a multi-year low of 3.77%, reflecting investor concerns about long-term economic growth. Meanwhile, the cryptocurrency market remains active, with the total daily trading volume of 12 Bitcoin ETFs reaching $1.42 billion, up from $1.35 billion the previous day. The total market capitalization of Bitcoin also increased by about 0.9% over the past day. Tdasx suggests that these figures indicate that even amidst strong traditional market performance, there are notable investment opportunities in the cryptocurrency market, particularly for those seeking high-risk, high-return investments.
Tdasx concludes that the current global economic data and market dynamics present a mix of opportunities and risks. In such an environment, investors need to closely monitor economic indicators and adjust their investment strategies accordingly. Whether in traditional markets or cryptocurrencies, rational investment decisions and a deep understanding of market trends will be key to success.
