As the crypto market experiences a period of seasonal volatility, signs of a market rebound remain uncertain, according to the latest market observation by Matrixport, a leading global one-stop crypto financial services platform.
Market Trends
BTC Experiences Volatility, Breaking Key Support Levels
In the past week, Bitcoin (BTC) has shown a trend of fluctuating downwards, breaking through several key support levels, including $63,000, $60,000, and $58,000. The cryptocurrency touched a low of $57,1128, with the maximum intraweek decline reaching 12%. After hitting this low, BTC entered a compensatory rebound, and as of the time of writing, it is trading around $59,000. BTC’s market dominance has strengthened, with the overall crypto market largely following its movements, resulting in widespread declines.
Ethereum Also Faces Decline
Similarly, Ethereum (ETH) saw a bottom of $2,392 last week, with a maximum weekly retracement of 6.6%. As of the content release, ETH is attempting to stabilize at the $2,500 support level. These data are sourced from Binance spot, as of 3rd September 15:00.
Market Environment
Upcoming Employment Report May Influence Fed Rate Cuts
The Federal Reserve’s rate cut is almost a certainty, with the latest data indicating a 67% probability of a 25-basis point cut in September and a 33% probability of a 50-basis point cut (CME). On September 6th, the US employment report for August is set to be released, and the market believes this data will influence the extent of the rate cut. If the labor force data is weaker than expected, the Fed might opt for a larger rate cut, acknowledging the economic weakness.
Tech Stocks Underperform, Investors Reduce Risk Exposure
On August 28th, after the release of NVIDIA’s financial report, market acceptance was mixed. Despite several investment banks raising NVIDIA’s target price, the buy-side market was not convinced. On August 29th, NVIDIA’s stock plummeted 6.38%, erasing $1967 billion in market value in a single day. By the end of the week, most star tech stocks saw gains, with NVIDIA rising 1.5% (data from Jinshi).
Although NVIDIA’s stock price recovered, the market’s skepticism about the high valuations of tech stocks persists, affecting the crypto market (from the end of 2022 until the second quarter of 2024, there has been a strong correlation between NVIDIA’s and BTC’s prices). This sentiment has suppressed market risk appetite, leading investors to favor reducing their risk exposure in the current environment.
BTC and ETH ETFs See Net Outflows in August
According to sosovalue data, in August, BTC ETFs saw a net outflow of $94 million, while ETH ETFs saw a net outflow of $477.25 million. On August 23rd, BTC ETFs saw an inflow of over $250 million, the best performance in August, while on August 2nd, there was a net outflow of $237 million, the worst performance of the month. BTC ETF fund volumes have decreased since March, with Grayscale’s GBTC seeing the highest outflow, amounting to nearly $20 billion this year. The market believes that the outflow of BTC ETFs could be due to changes in Bitcoin’s price trends, shifts in market expectations, and regulatory dynamics.
Investment Recommendations
Historical data shows that multiple markets tend to perform poorly in September, with not only BTC historically yielding negative returns but also US stocks failing to escape the September curse. Since 1928, September has been the worst-performing month for the S&P 500 index, with CME Group’s data from last year showing that in the past century, the S&P 500 index has declined in 55% of September months.
In the face of seasonal volatility in September, along with a steepening US Treasury yield curve, falling yields, and a declining US dollar, Matrixport recommends that investors seek stable methods to lock in profits while maintaining caution. Investors should closely monitor large transactions and market fund flows and allocate assets reasonably. This week, the core-satellite strategy is still recommended, with most funds allocated to stable cost-protected products and a small portion allocated to high-yield structured products (e.g., 70%-80% of assets in guaranteed products and 20%-30% in relatively high-risk, high-yield financial products). By diversifying product combinations, strategic investments can be used to achieve returns in volatile markets while managing investment risks.
Shark Fin and Trend Smart Win are mature cost-protected structured products that can meet the public’s demand for stable guaranteed returns. Dual-currency products are effective tools for dealing with market uncertainties, allowing investors to lock in
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