Report dated 2025.6.19
Yesterday, the Federal Reserve's interest rate decision was officially announced, and there is a high probability of two rate cuts this year, with each cut being 25 basis points in September and December, in line with market expectations.
As a result, the three major U.S. stock indices rebounded collectively.
Especially in the cryptocurrency sector, Circle and Coinbase surged significantly, dominating the front pages of major brokerages for four consecutive days, attracting global funds, including speculative and active funds from the U.S. stock market, with trading enthusiasm comparable to that of Bitcoin micro-strategy in previous years.
Now, not only the cryptocurrency industry but the entire financial circle is focusing on USDC issuance, stablecoin legislation, and Coinbase's stock progress.
However, Bitcoin did not rise along with the U.S. stock market, possibly because the crypto market is more sensitive to the escalation of the Middle Eastern situation, with concerns that the situation may worsen, leading to preemptive hedging.
Gold prices are stable with a slight decline, showing no obvious demand for safe-haven assets. U.S. Treasuries, on the other hand, performed well, with yields on 10-year and 30-year bonds significantly dropping and prices rising, reflecting an increase in funding hedging sentiment.
The VIX index is at 20.1, indicating that U.S. stocks have entered a high volatility phase.
1. Middle East conflict
The current escalation in the Middle East situation has a significant impact on the market, with Iran launching long-range heavy missiles at Israel.
The U.S. is considering military action against Iran this weekend, citing that Iran's uranium enrichment level has reached 60%, crossing an international red line.
A senior aide to Trump revealed that Trump has approved an attack plan, but has not issued a final order yet, still monitoring whether Iran will abandon its nuclear program.
The market fears that Iran might truly develop nuclear weapons, but as it stands, Iran does not have this capability; otherwise, they would have made a big announcement, and the U.S. and Israel would not act easily.
Going forward, pay less attention to what Iran says and more to what it does; the situation in the Middle East may escalate further, requiring close monitoring.
2. Federal Reserve interest rate meeting
This Federal Reserve interest rate meeting was generally neutral, with Powell reiterating that interest rate cuts depend on data. The dot plot indicates a 25 basis point cut in September and December, with the probability of a cut in September increasing.
Powell explicitly mentioned that the impact of tariffs on inflation is more stubborn, and inflation pressures may rise in the coming months, with geopolitical conflicts and oil prices pushing up inflation, but the impact is more short-term.
The U.S. economy remains healthy, the unemployment rate is low, and there is no urgent need to cut interest rates in the labor market.
However, he also stated that the extent, duration, and timing of the full impact of tariffs are highly uncertain, so we need to proceed cautiously.
3. On-chain data
From the perspective of Bitcoin's turnover rate, there has been a slight increase in turnover, mainly due to short-term holders selling off due to the Middle East conflict.
From the supporting data, the $93,000-$98,000 range remains the strongest support. Even though there has been significant price fluctuation recently, this group of investors has not shown signs of panic selling and their positions remain stable.
The holding in the $100,500-$105,000 range has increased to 1.947 million coins; as of now, it's still okay, but if it continues to accumulate, risks may rise.
Currently, BTC's market cap share is increasing, while ETH and altcoins' shares are decreasing, indicating a weakening market risk appetite.
From the funding perspective, on-site funds have increased by $200 million, totaling $261.5 billion.
USDT's market cap is $155.564 billion, an increase of $88 million, with slight inflows from Asian funds but low trading willingness. USDC's market cap decreased by $126 million, while trading volume increased significantly.
This indicates a divergence in sentiment between the U.S. and Asian markets, where Asian funds are flowing in but are reluctant to trade, while U.S. funds are flowing out yet trading actively.
Overall, market sentiment is okay, the fear and greed index is around 48, and everyone is quite cautious.
After the Federal Reserve's interest rate decision, the market's focus has shifted to whether the conflict in the Middle East will escalate further; everyone is waiting for clearer signals.