Analysis Conclusion


Bitcoin (BTC) and Ethereum (ETH) have certain risk-hedging attributes under specific macro environments, but their high volatility makes them closer to risk assets rather than traditional hedging assets.

Currently, BTC is quoted at $119,500-$120,600, and ETH is priced at $4,700, both nearing historical highs, with the total market capitalization reaching $4.2 trillion. Considering macro factors, on-chain data, and market sentiment, virtual currencies attract risk-averse fund inflows under inflation, geopolitical risks, and expectations of monetary policy easing, but short-term pullback risks need to be vigilant. It is recommended to allocate small positions to BTC and ETH, diversifying to capture potential bull market trends while strictly controlling risks.




Market Dynamics:


Bitcoin (BTC)
Price Dynamics: BTC is in the range of $119,500-$120,600, approaching the historical high of $123,000.
Institutional Activity: On May 29, BlackRock iShares Fund increased its holdings by 4,476 BTC, valued at about $481 million, with a total holding of 663,773 BTC (approximately $7.127 billion). Japan's Metaplanet increased its holdings by 518 BTC, with a total holding value exceeding $10 billion.


July U.S. CPI was 2.7%, below expectations; the probability of a rate cut in September rose to 94%. The hash rate reached 892 EH/s, setting a new historical high, indicating a clear bullish trend; avoid going against the trend.

Ethereum (ETH)
Price Dynamics: ETH is priced at $4,700, with a weekly increase of 21%, nearing the 2021 high of $4,878.
Institutional Activity: On August 11, BlackRock iShares Fund increased its holdings by 150,580 ETH, valued at about $529 million, with a total holding of 1,370,710 ETH (approximately $3.64 billion). BitMine purchased ETH worth $2 billion, holding 883,100 ETH; SharpLink purchased ETH worth $1.62 billion, holding 438,200 ETH.
On-chain Data: Daily transaction volume is 1.875 million, TVL exceeds $90 billion, and staking volume is 35.8 million ETH, accounting for 30% of total supply. 📈
Policy Factors: The U.S. Project Crypto policy promotes on-chain finance, benefiting the ETH ecosystem. 🚀

The total market capitalization is between $4.06 trillion and $4.14 trillion, an increase of 2.5%-3% compared to yesterday. Solana (+13%) and Litecoin (+11%) rose simultaneously, with funds spreading to other crypto assets. Trump's tariff policy caused BTC to briefly drop to $119,200, and short-term volatility risks should be monitored.

Technical Analysis:
BTC: Current price is $119,500-$120,600, approaching the historical high of $123,000. Support level is $115,000, resistance level is $120,000-$123,000. If it breaks through $120,000, the target is $135,000. RSI is 62, moderately high, and MACD shows bullish momentum.


ETH: Quoted at $4,700, nearing the high of $4,878. Support level is $4,200-$4,400, resistance level is $4,800. RSI is 60, Bollinger Bands are expanding, and volatility is rising. If it breaks through $4,800, the target is $5,000.


Tips: BTC and ETH have recently shown slight fluctuations, likely to induce short selling; short-term pullback may reach BTC $115,000 and ETH $4,200, but the long-term trend is supported by risk-averse funds.


Short-term Risks: The high volatility of virtual currencies (annualized volatility over 50%) limits their hedging capabilities. If BTC drops below $115,000, it may test $110,000; if ETH drops below $4,200, it may reach $4,000. Macroeconomic policies (such as tariffs) or tightened regulations may trigger sell-offs.
Short Selling Risks: In the past week, ETH short selling resulted in liquidations of $135 million; high leverage short positions should be approached with caution. Market bullish sentiment dominates, making short selling strategies riskier.
External Factors: Volatility in U.S. stocks (such as a 2% drop in NASDAQ) and a strengthening dollar index (DXY) may suppress virtual currency prices.

Investment Advice
1. BTC: Build a small position (10%-20%) in the range of $115,000-$118,000, stop-loss at $110,000, target $135,000, to capture opportunities from risk-averse funds.


2. ETH: Increase small positions in the range of $4,200-$4,400, stop-loss at $4,000, target $5,000, focusing on DeFi ecosystem dividends.


3. Diversified Allocation: Allocate 10%-15% of funds to CFX (currently $0.1932, recommended entry at $0.1557-$0.18) and other Layer-1 assets like Solana to diversify risk.


4. Risk Management: Set stop losses at 5%-10%, avoid full position operations, and ensure liquidity to respond to bull market trends.

PS:
Virtual currencies show hedging potential under inflation and geopolitical risks, with BTC and ETH likely to break new highs supported by institutions and ecosystems. At this stage, it is recommended to take small positions, be patient, wait for pullbacks to buy at relatively low prices, go long, and strictly control risks to welcome the bull market dividends.

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