In the wild world of cryptocurrencies, every week is full of variables, and this week is particularly lively. A series of key economic data is about to make a heavy appearance, the token unlock of altcoin projects is also gathering momentum, while the two giants, Bitcoin and Ethereum, are performing spectacularly in their respective markets. Get ready to dive deep into this cryptocurrency carnival.
Economic data bomb, about to explode in the market
On Tuesday evening, the world's attention will be focused on the U.S. Consumer Price Index (CPI) inflation data for July. Immediately following, on Thursday evening
In addition, the U.S. Producer Price Index (PPI) for July will also shock the market. And on Friday, what surprises or shocks the U.S. Retail Sales data for July will bring to the market remains unknown. This series of data is like powerful bombs that could change the market's direction at any time.
Currently, there is a strong expectation in the market that the Federal Reserve will cut interest rates in September, with a likelihood as high as 90%. This is undoubtedly super bullish news for risk assets. Imagine, a rate cut is like a timely rain that can nourish a parched market, allowing risk assets to flourish. However, the dollar index, that mischievous character, has recently retreated after the labor market data was revised down, yet its trajectory remains elusive and unpredictable. It’s important to understand that the dollar index is closely linked to global M2 money supply, like inseparable twins, and its every move could stir waves in the cryptocurrency market, so one must never let their guard down.
Is the altcoin unlocking wave a blessing or a curse?
This week, several altcoin projects will face a critical moment of token unlock. It's like the dam opening its gates to release water, a large number of tokens will flood the market, and the market supply will instantly increase. Based on past experience, this often brings considerable downward pressure on token prices. Just like when a large quantity of a certain product suddenly appears on the market, its price will naturally be affected. For investors holding these altcoins, this week is undoubtedly a tense moment, as they need to closely monitor their assets to see if they can withstand the test of this unlocking storm.
Bitcoin: An explosion after consolidation?
After more than three weeks of consolidation, Bitcoin seems to have finally welcomed a new upward cycle, like a martial arts master silently gathering strength in the dark. Historical data and short-term holder cost indicators suggest that Bitcoin's price may aim for peaks between $130,000 and $150,000. Many investors are already eager to showcase their skills in this wave of rising market. For example, I plan to reduce my Bitcoin holdings by another 10% during this period to lock in some profits. However, the market is always full of uncertainties. I believe the market in September and October may not be very optimistic, expecting significant fluctuations, with an overall trend leaning towards decline until a potential rebound at the end of October. It's like riding a roller coaster, thrilling but also filled with risks.
Ethereum: The rise of a strong new force
Recently, the cryptocurrency market has been anything but quiet over the weekend, with both Bitcoin and altcoins performing well, and Ethereum leading the charge to set a new high for this cycle. Why is it so strong? There are many reasons. First, the number of whale addresses holding over 10,000 Ether has unusually increased in July, these whales act like giants in the market, and their entry often signals the movement of large funds, undoubtedly providing a strong boost to the market. Secondly, the inflow of funds into the spot Ethereum ETF has frequently surpassed that of the Bitcoin ETF, even exceeding Bitcoin in terms of net capital inflow for the first time. Analyst Ali points out that this is often seen as a signal for the arrival of the 'altcoin season.' Market funds are flowing from Bitcoin to Ethereum and other altcoins, causing Bitcoin's market share to dip below 60% and drop below the 50-week moving average, further confirming early signs of the altcoin season. Ethereum is like a rising star, shining brightly in the crypto market.
Market sentiment is high, MicroStrategy stirs the pot
Bitcoin's price recently broke through the key resistance level of $117,000 to $118,000. This breakthrough is significant, allowing investors who bought in the past month to taste the sweetness of profits, greatly enhancing their confidence in holding. In the Binance exchange, the strength of active buy orders has dominated, with many people eager to buy directly at market price instead of patiently waiting for limit orders to fill, indicating a rapid return of bullish sentiment in the market. As prices rise, the open contract volume on Binance is also gradually increasing, showing that a new round of active buying is continuously accumulating. If this trend can be sustained, coupled with the phase expansion momentum of M2, Bitcoin's price is expected to reach new highs before the adjustments at the end of September.
MicroStrategy has also been active recently, attracting the attention of many investors. They hinted that they might have purchased Bitcoin again last week and will announce the details soon. Previously, they had already spent $2.5 billion on Bitcoin purchases, which has already shocked the market. Now, MicroStrategy has announced a refinancing plan of up to $4.2 billion, aimed at further increasing Bitcoin holdings. Moreover, MicroStrategy has launched a new coin purchase model based on market net asset value (MNAV), which acts like a precision instrument, dynamically adjusting its Bitcoin purchase strategy by assessing the valuation of the company's stocks. When MNAV is below 2.5, they will not issue new shares to purchase Bitcoin; when MNAV is between 2.5 and 4, they may issue shares to buy at an opportune moment; and when MNAV exceeds 4, they will systematically issue shares on a large scale to strengthen Bitcoin holdings. This model aims to control leverage levels and ensure the health of the company’s balance sheet. However, whether this high threshold set by the model is realistic still needs time to verify. Many companies emulating MicroStrategy have also entered the market, but their strategies differ, with some companies even adopting high-leverage debt strategies. It's like a gamble, which may trigger some risk events in future bear markets, but bear markets are also a process of market deleveraging, eliminating poor performers, leaving behind only those robust enterprises that can withstand the test.
This week's cryptocurrency market is full of opportunities and challenges, with economic data, altcoin unlocks, the trends of Bitcoin and Ethereum, as well as market sentiment and actions from major institutions; each factor could influence the future direction of the market. Investors need to remain vigilant at all times, like astute hunters, sharply capturing every signal in the market to seize opportunities and achieve their investment goals in this uncertain market.
Disclaimer: The content of this article is for reference only and does not constitute any investment advice. Investors should consider their own risk tolerance and investment goals, view cryptocurrency investments rationally, and avoid blindly following trends.