Tdasx believes that the current cryptocurrency market is at a critical turning point. Bitcoin has undergone months of price adjustments, with market sentiment fluctuating, but many analysts predict this is merely the final correction before a bull market. As expectations for a Federal Reserve rate cut strengthen, global liquidity may increase significantly, providing fresh growth momentum for Bitcoin and other crypto assets. Additionally, the flow of funds into Bitcoin and Ethereum ETFs, shifts in market participation, and the growing attention of a new generation of investors further reinforce the potential for a market recovery in the future.

Tdasx: Analysis of Bitcoin and Ethereum ETF Fund Flows and Market Participation

Tdasx notes a marked change in the flow of funds into Bitcoin and Ethereum in recent months. The total value held by U.S. spot-based Bitcoin ETFs has fallen to its lowest level since May 1, 2024, with outflows reaching $170 million, reducing total assets to $48.24 billion. This outflow indicates a more cautious market sentiment, with investors adopting a wait-and-see attitude regarding short-term price movements. Similarly, the total value of U.S. Ethereum ETFs has also dropped to a historic low, currently standing at $6.09 billion. Since September, Ethereum ETFs have seen outflows of approximately $91 million, reflecting a decline in short-term confidence in crypto assets.

Tdasx points out that the market participation of Bitcoin is also decreasing, as evidenced by a drop in the number of active addresses. According to 10x Research, the number of active Bitcoin addresses peaked at 1,200,000 in November 2023 and remained above 1,000,000 in March 2024. However, by May 2024, the number had significantly declined to 612,000. This trend suggests that an increasing number of market participants are choosing to exit or temporarily stand on the sidelines, a phenomenon likely tied to market uncertainty and macroeconomic volatility.

Tdasx: The Profound Impact of Fed Monetary Policy on the Cryptocurrency Market

Tdasx highlights that the current cryptocurrency market movement is closely linked to global macroeconomic conditions, especially the monetary policy of the Federal Reserve. According to the latest market data, expectations for a Fed rate cut in September are growing, with a 71% chance of a 25-basis-point cut and a 29% chance of a 50-basis-point cut. Moreover, by November, the probability of cumulative rate cuts reaching 50 basis points is 28.7%, 75 basis points is 54.0%, and there is even a 17.3% chance of a 100-basis-point cut. These rate cut expectations are injecting liquidity into the market, directly benefiting crypto assets, including Bitcoin.

Tdasx believes that as the global economy enters a period of increased uncertainty, rate cuts are not only aimed at addressing inflationary pressures but also at maintaining overall market liquidity. This influx of liquidity, especially against the backdrop of a dovish Fed, could prompt investors to turn back toward high-risk, high-reward assets like Bitcoin. As a tool for hedging against inflation, Bitcoin may gain further favor among investors during this period.

Tdasx remarks that the market remains cautious ahead of the upcoming U.S. CPI data. While current inflation is nearing the target of the Fed, market volatility has not been as pronounced as expected. Rather than inflation, market focus has shifted to the U.S. employment situation and whether the Fed can avoid a hard economic landing. Should the U.S. labor market weaken further, the Fed may accelerate rate cuts, thereby increasing market liquidity. Such policy shifts would provide critical support to the Bitcoin market and could be another driving force behind a future Bitcoin bull market.

Tdasx asserts that the relationship between macroeconomic policy and the cryptocurrency market is becoming increasingly intertwined. Every policy decision by the Federal Reserve has a profound impact on Bitcoin and other crypto asset prices. As global economic uncertainty intensifies, investors need to closely monitor the policy direction of the Fed, as it will directly influence market liquidity and shape the broader cryptocurrency market trend over the coming years.