From last night to today, Bitcoin experienced a 'door painting market': it peaked at 117K, but by this morning, it fell back below 115K, and the short-term upward momentum has completely disappeared, returning the market to a consolidation range. ETH was even weaker, with the ETH/BTC exchange rate dropping from 0.0386 to 0.036, and the price falling directly from 4788 to 4200, essentially consuming last week's rebound.
A single word from Powell could be a turning point for the market.
In recent days, everyone has been focused on Thursday's Jackson Hole annual meeting. A rate cut in September was originally a market consensus, but inflation is too stubborn, and the rate cut expectations from CME are also cooling down:
The probability of maintaining interest rates has risen to 16.4%;
The probability of a 25BP rate cut has fallen to 83.6%.
In stark contrast to last week's dovish atmosphere, this has directly dragged down U.S. stocks and the crypto market. Gold prices remain stable at $3375, and everyone is waiting for new signals from the Federal Reserve. If it leans hawkish, the pressure for a correction will be even greater.
Additionally, there has been an 'unexpected plot' in geopolitics: the leaders of Japan and South Korea met and simultaneously issued guarantees for security in Ukraine, which the market interpreted as 'peace expectations', causing oil prices to drop by 1%. For crypto, if the situation cools down, it would be a positive; however, if talks break down, market sentiment may plummet.
ETH: Is the persistent decline hiding signals of a potential rise?
ETH surged 29% last Monday, almost touching the historical high of 4865, but today it fell back below 4200, returning to mid-August levels. Institutional inflows and the Pectra upgrade keep its long-term logic unchanged, with a potential target of 8000, but short-term pressure is significant.
From a funding perspective:
Last week, overall crypto ETF inflows were $3.75 billion, with ETH accounting for 77%;
However, on August 18, there was a net outflow of funds, with ETH ETF losing $197 million and BTC ETF losing $122 million.
This indicates a cautious shift in short-term funds. Meanwhile, ETH staking unlocks have reached a recent high, which may be institutions shifting to ETFs or taking profits temporarily.
However, liquidity staking pools like Lido continue to expand, with the staking proportion stabilizing at 27%. I believe this round of correction is more of a short-term disturbance; if the annual meeting leans dovish, ETH is likely to quickly regain strength.
Another piece of data suggests that Ethereum can rebound. Observing on-chain data, the same signals have appeared as before the last rise. The last time this signal appeared, ETH rose by 33%. How much will it rise this time? We shall see!
Today's altcoin performance is polarized:
Leading the rise: WEMIX rose nearly 12%, Onyxcoin and Bio Protocol also increased over 10%, benefiting from the Korean market, DeFi, and on-chain funds. #OKB and #POL also performed well.
Leading the decline: Pump.fun, Helium, and Ethena fell by 5%-10%, XRP dropped below $3, and AKT, THETA, and ICP were major losers.
Overall, altcoins are still dominated by speculation: they rise quickly but fall even faster. The ones that can endure in the long term are still the mainstream coins.
Next, we can focus on the altcoin sector:
In terms of sectors:
DeFi, Layer2: After unlocking pressure, there may be opportunities for a follow-up rise;
AI concept: There was a sharp short-term drop, but the rebound potential is strong;
RWA & stablecoins: May run independently under favorable policy conditions;
Meme: If Pump.fun restores liquidity, another wave may come.
Summary: This round of correction is a breather, don't panic, focus on on-chain fundamentals + strong sectors, and once the market sentiment turns dovish, a rebound could ignite at any moment.
I'll stop the article here! If you're still unsure about the direction in the crypto space, why not join me in planning? I’m waiting for you; otherwise, in the next wave of the market, you might find yourself on the other side.
