On a macro level, as the September monetary policy meeting approaches, discussions about whether the Federal Reserve will cut rates have once again become the market's main focus. According to CME's 'FedWatch' data, the market generally expects the probability of a rate cut in September to be about 75%, with the likelihood of maintaining the current rate at 25%. By October, market judgments become more complex: the probability of a cumulative rate cut of 25 basis points is at 51.5%, while the probability of a further cut to 50 basis points also reaches 35.3%.
However, opinions within the Federal Reserve are not consistent. Cleveland Fed President Mester emphasized in an interview that the current inflation level remains relatively high and has shown signs of increasing over the past year. If a decision had to be made at this moment, she would not support a rate cut in September. Although the labor market appears slightly weak, the unemployment rate is still in what she considers to be close to 'full employment,' so maintaining a moderate tightening stance seems more reasonable to her.
In contrast, another Federal Reserve official, Collins, has expressed a more flexible stance. He believes that if the job market conditions weaken further, a short-term rate cut may be an appropriate response. He also expects inflation to remain relatively high until the end of this year and not begin to decline until 2026. This differentiated stance has led market participants to gradually reduce their bets on 'two rate cuts' this year.
At the same time, the correlation between traditional finance and crypto assets has also been reflected. Yiren Digital (NYSE: YRD), listed on the NYSE, disclosed in its second-quarter financial report that due to the rise in Ethereum prices, the company recorded a fair value adjustment gain of 28 million RMB (approximately 3.9 million USD), and as of the end of June, it held 11,197.5 ETH.
On-chain data shows that the turnover rate decreased yesterday, suggesting that players may be preparing for no rate cut in September.
URPD data shows that 1.607 million Bitcoins are accumulated in the $100,500 - $107,000 range; 1.568 million Bitcoins are accumulated in the $93,500 - $98,500 range.
Overall, after a short-term adjustment, Bitcoin's overall structure suggests that the pullback may be nearing its end. The current market focus is on the key support level of $112,000. If it holds, the bullish trend is likely to continue; if there is an unexpected breakdown, the most pessimistic outcome could be a drop to $101,000, but this risk is relatively low.
A greater suspense lies in tonight's Jackson Hole annual meeting. Powell's speech will be a market barometer. He is expected to continue insisting on a 'data-driven' stance without clearly stating whether there will be a rate cut in September. However, if his remarks convey a signal of 'not ruling out a rate cut,' it may be interpreted by the market as a positive indication. Tonight, we need to be alert to potential volatility during the meeting.
