U.S. economic data released last week exceeded expectations, instantly cooling market speculation about Fed rate cuts, significantly undermining investor confidence, and the wait-and-see atmosphere persists; today (the 18th), the cryptocurrency market faced selling pressure again, with both Bitcoin and Ethereum declining, and competing coins falling into a sea of red.
According to CoinGecko market data, Bitcoin's lowest point today dipped to $115,222, currently reporting at $115,236, with a daily decline of 2.4%, pulling back 7% from last week's historic high of $124,128; Ethereum is similarly under pressure, down 4.3% in the past 24 hours, now reported at $4,287; among the top 20 cryptocurrencies by market capitalization, only Chainlink (LINK) is moving against the trend, with an increase of less than 1%, currently at $24.59.
Vincent Liu, Chief Investment Officer of Kronos Research, stated: "Bitcoin's decline reflects that, in light of U.S. inflation data exceeding expectations, investor sentiment is more cautious. Rising inflation data means a lower probability of Fed rate cuts, leading to a stronger dollar, and the market naturally turns to safe havens."
Looking back at last week's market, Bitcoin initially surged due to the consumer price index (CPI) being lower than expected, reaching a historic high, but the subsequent release of the July producer price index (PPI) showed a year-on-year increase of 3.3%, exceeding market expectations, dousing investor hopes for a rate cut in September and interrupting the upward trend.
Vincent Liu pointed out: "At this moment, traders choose to stand still, preferring to wait for clearer macroeconomic signals and market directions before re-entering."
The cryptocurrency market sentiment indicator 'Fear & Greed Index' currently shows 56 (out of a maximum of 100), indicating that the overall investment atmosphere is in the 'neutral' range.
ETF capital flows indicate 'rotation' rather than retreat
However, BTC Markets analyst Rachael Lucas is more optimistic in her market interpretation. She believes that the capital flow into Bitcoin spot ETFs shows that this wave of decline is not a complete market retreat but more like a 'rotation of funds.'
Last Friday, Grayscale and ARK Invest's Bitcoin spot ETF faced capital withdrawal, but BlackRock's IBIT ETF continues to attract inflows. Ethereum spot ETF capital flows show a similar trend.
Rachael Lucas analyzed: "Although the total capital flow for the day has slightly decreased, institutional participation remains strong, indicating that investors are shifting towards lower-cost products rather than completely exiting the market."
Rachael Lucas stated that the key support for Bitcoin currently lies in the range of $115,000 to $112,500, and if it falls below these levels, it may trigger a new round of declines, testing the $110,000 mark.
This week's focus events
Most analysts believe that the next important catalyst driving the market will still be macroeconomic events in the U.S.
Rachael Lucas mentioned: "Market focus will shift to the Jackson Hole central bank annual meeting on August 22, and if Fed Chairman Jerome Powell's remarks lean dovish, it may reignite market risk appetite. Additionally, continued net inflows into ETFs and corporate allocations will also become important support for Bitcoin."
Vincent Liu reminds that the U.S. initial jobless claims data to be released on August 21 will also be a key factor influencing Bitcoin's next move.
MICA Daily | Bitcoin's daily chart is forming a 'double top' pattern, be cautious of a pullback before the interest rate cut in September.
"Inflation shadow looming! Bitcoin's key support at $115,000 is at risk; if it fails to hold, it may test the $110,000 mark" this article was first published on (Blockcast).
