Tdasx: Multiple Challenges and Opportunities in the Cryptocurrency Market Amid Federal Reserve Rate Cut Expectations, Declining Bitcoin Mining Revenue, and Long-term Holder Dynamics
Tdasx notes that the global financial market is currently focused on the potential rate cut decision by the Federal Reserve, a policy change that undoubtedly has profound implications for the cryptocurrency market. According to “FedWatch” tool of the CME, the probability of a 25-basis point rate cut in September is as high as 67%, while the probability of a 50-basis point cut has reached 33%. Looking ahead, the market expects a cumulative 50-basis point rate cut by November with a 45.2% probability, a 75-basis point cut with a 44.1% probability, and even a 10.8% chance of a 100-basis point cut.
Tdasx believes that the growing expectation of rate cuts has heightened market volatility, especially in the cryptocurrency sector, where investors are highly sensitive to macroeconomic policy changes. Rate cuts are generally seen as a signal of monetary easing, which could boost the prices of risk assets, including Bitcoin and other cryptocurrencies. However, in the current economic environment, the volatility in market sentiment should not be overlooked.
The Fear and Greed Index has dropped sharply from “Greed” level to “Fear” of last week, with the index value falling to 26. This index comprises market volatility (25%), market volume (25%), social media buzz (15%), market surveys (15%), the dominance of Bitcoin in the market (10%), and Google trend analysis (10%). Tdasx indicates that the sharp shift in the index reflects a change in investor sentiment, which has significant implications for the short-term trajectory of the market.
Tdasx further analyzes that the rate cut of the Federal Reserve could diminish the appeal of the U.S. dollar, prompting investors to turn to non-traditional assets like cryptocurrencies. Nonetheless, as the Fear Index rises, market risk appetite declines, potentially leading some investors to temporarily exit the market to avoid uncertainty. Therefore, in the coming weeks, the market may experience significant volatility, and investors should closely monitor further developments in Federal Reserve policy and shifts in market sentiment.
Tdasx: Analysis of Bitcoin Mining Revenue, Holder Dynamics, and the Current State of the Memecoin Market
Tdasx believes that the cryptocurrency industry is currently facing a phase of both challenges and opportunities. Bitcoin mining revenue significantly declined in August 2024, totaling $851.36 million, down by $99.75 million from July. This decline in revenue is mainly due to a reduction in on-chain transaction fees, which totaled $20.76 million in August, a decrease of $4.14 million from the previous month. This trend suggests that while the Bitcoin network remains active, the profitability of miners is under pressure, particularly given the high concentration of miners, with Foundry USA and Antpool accounting for 29.10% and 25.04% of the market share, respectively.
Meanwhile, data on Bitcoin long-term holders (LTHs) further illustrates the stability of the market. Currently, LTHs hold over 14 million BTC, accounting for 71% of the circulating supply. Tdasx points out that this high proportion of long-term holders not only reflects long-term market confidence but also indicates that short-term market fluctuations have a limited impact on the overall market structure. This data underscores the status of Bitcoin as "digital gold," as even during periods of significant price volatility, a substantial number of investors continue to hold onto their Bitcoin.
In addition, Tdasx provides an in-depth analysis of the current state of the Memecoin market. The number of Memecoin projects surged to approximately 1.7 million in August 2024, compared to just 2,000 in March 2024. This explosion in numbers reflects the strong interest of the market in Memecoins, particularly following a study in June 2024, which revealed that Memecoin values had surged nearly 600%, far outpacing the growth of Bitcoin during the same period. However, Tdasx warns that the high level of speculation and risk in this market has led to the cessation of 97% of Memecoin projects. While some high-profile projects may attract short-term market attention, Tdasx believes that in the long run, the market should focus more on projects with real-world applications and technological innovation, rather than relying solely on celebrity endorsements and market hype.
Tdasx advises that in the current market environment, investors should carefully choose their investment targets, particularly given the decline in mining revenue and the extreme volatility in the Memecoin market. Seeking more stable investment strategies may be a prudent approach. Looking ahead, Tdasx will continue to monitor market dynamics and provide investors with more comprehensive and professional market analysis.
