Market Analysis on August 3, 2025
With the U.S. stock market closed over the weekend, the cryptocurrency market fell again last night. This was both a preview of the inertia decline after the U.S. stock market opened and also indicated that the main force behind this sell-off came from U.S. players. Last night, Ethereum fell to a low of 3,400 USD, marking the lowest point in nearly two weeks, while Bitcoin dipped below 112,000 USD. This not only broke the previous week's correction low but also approached the most important support price of 110,000 USD. This price is significant because it has undergone several tests before breaking through and can be seen as the starting point of a new range, which will then form an important support level in the new range, the importance of which is self-evident.
The drop in Bitcoin is mainly linked to the U.S. stock market. I mentioned before that for strong Ethereum, it does not need Bitcoin to break through 120,000; as long as it can maintain a sideways trend, that would be enough. However, things have not gone as hoped. Currently, looking at the U.S. stock market, there may be a chance for a breather after the weekend, especially since Bitcoin managed to hold above 110,000 yesterday, which reflects the confidence in the U.S. stock market. Many people may be worried about Ethereum during this drop, as it has seen a maximum decline of 15% compared to its peak. I actually think this is still acceptable. Ethereum has seen a significant pullback, and it is normal to see a correction of more than ten points; otherwise, a 10x leverage would be unsustainable. Additionally, as shown in the figure below, the exchange rate of Ethereum to Bitcoin has not broken new lows temporarily, indicating that Ethereum still belongs to the strong coin category.
How to look at things next? Let me share my recent situation first. Currently, the price has nearly touched the point where I last reduced my position, so I am not considering adding back for now, as there is a principle for adding positions during a bull market: one must capture the price difference. When Ethereum was at the 3,800 resistance level, I executed some put options. However, as the price has dropped, I only captured some option premiums, including BNB and ETH. I don't hold many altcoins, and this portion of profit is not even comparable to Polkadot, so I haven't specifically mentioned it. However, you can see that behind these operations, it shows I am quite confident about breaking through the resistance, and my outlook for the future is also generally optimistic.
Regardless of what point level it retraces to, the current bull market in the cryptocurrency market is highly unlikely to have ended. We are still in a rate-cutting cycle, with the probability of a rate cut in September remaining above 50%. Furthermore, the cryptocurrency space will not be short of narratives; the two major narratives of stablecoins and RWA are likely to appear with high market capitalization. Additionally, after Trump's son publicly endorsed BTC and ETH again following February 25, the recent WLFI project has also purchased a large amount of Ethereum. After Bitcoin's price has become somewhat unattainable and the number of Bitcoins purchased by MicroStrategy is out of reach, Wall Street will surely look for a new crypto king, and Ethereum is the obvious choice.
Thank you for your attention and likes.
