Last Friday, Powell's comments during the meeting unexpectedly suggested the possibility of a rate cut in September, causing almost a universal rise in prices. However, this sentiment only lasted for two days, and the market began to slightly decline over the weekend. Ultimately, his remarks merely reinforced the belief that a rate cut in September is likely, although this expectation had started to circulate as early as June. Moreover, his comments subtly revealed concerns about economic trends, and even the rate cut in September is not yet a certainty.
The Federal Reserve has not yet reached a consensus internally, and before the September meeting, there will be inflation and employment data to be released. If the data is poor, expectations for a rate cut may fluctuate significantly.
Upcoming key macro data days:
Wednesday: Nvidia will release its earnings report. If the results are good, market sentiment will improve.
Friday: The U.S. will announce the PCE price index, which is the inflation indicator most concerning to the Federal Reserve.
September 5: The U.S. will release non-farm payroll data.
September 10: The U.S. will release CPI inflation data.
Last Friday, funds flowed out of Bitcoin ETFs again, although it was only $23 million, marking the sixth consecutive day of outflows. Moreover, not only is ETF money flowing out, but the amount of Bitcoin on exchanges is also increasing, mostly in preparation for selling. Especially now, when ETFs are performing, many people who sold Bitcoin have turned to buy Ethereum. Over the weekend, some long-time Bitcoin whales have been selling Bitcoin and buying Ethereum.
In contrast, Ethereum ETFs saw an inflow of $337 million on Friday, marking two consecutive days of net inflows. The number of Ethereum being unstaked on-chain has dropped to 840,000, while the number of new staking applications has doubled compared to Thursday, reaching 400,000. Meanwhile, Ethereum on exchanges is also being withdrawn at a faster pace, indicating that more and more people are purchasing ETH and transferring it to their wallets for staking.
This is why the exchange rate of ETH against Bitcoin surged above 0.043 over the weekend. In reality, Ethereum is siphoning funds from the Bitcoin market. Of course, while Ethereum also dipped slightly alongside Bitcoin today, it is likely to remain stronger than Bitcoin as market sentiment warms up.
In conclusion, last week it was hinted that Ethereum would test the 4650-4550 range for correction before attempting to surge towards 5000. Over the weekend, the lowest Ethereum price was 4680, and it surged to a high of 4956. Currently, this support range remains unchanged.
Many ancient Bitcoin whales are starting to switch to Ethereum, suggesting that a standalone market for Ethereum in the second half of the year may be in the making. The altcoins in hand are mostly set up, including LTC, DOGE, UNI, AAVE, PEPE, SUI, and IP.
When planning new strategies, it's essential to identify narratives and points for speculation; otherwise, continue holding and adding to those positions.
Ethereum's continuous new highs haven't caused altcoins to surge dramatically. Leading altcoins are showing strong support, perhaps waiting for the $5000 mark. In any case, it's wise to buy some quality top-tier altcoins now. With interest rate cuts returning the sentiment in September, a wave of FOMO is expected around that time. If any of the held altcoins perform well after the rate cut, it's advisable to take back the principal, as bullish sentiment can lead to rapid surges and drops.
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