August 2, 2025 Market Analysis
In the past 24 hours, it was another painful day, with the entire crypto market seeing liquidations of 759 million USD, affecting over 180,000 people. This liquidation volume has already reached half of the risk threshold for a bull market. I previously mentioned in (500 million liquidations, this drop is the signal for the bull market to continue its rally!) that when the 24-hour liquidation amount exceeds 10 billion RMB, it is one of the signals that a bull market may reverse. According to this indicator, this drop still belongs to a pullback, but currently, the cumulative pullback of Bitcoin and Ethereum has already been around 10%, which will definitely have a significant impact on the market.
Looking at the overall situation, last night's secondary drop was more influenced by the US stock market. The Nasdaq opened lower and continued to decline, with a daily drop of 2.24%. The hardest hit were cryptocurrency concept stocks, among which the well-known Coinbase dropped by 16.7%, and MicroStrategy fell by 8.77%. Several conceptual stocks related to MicroStrategy saw even more outrageous pullbacks. A few days ago, I mentioned that investors are well aware of the significant bubble in this wave of coin-stock concepts; many companies hope to achieve backdoor listings or cash-outs by buying coins, which will ultimately lead to a mess. It was just unexpected to be affected by the US stock market, causing the deflating process to occur much earlier.
The direct reason for this drop in the US stock market is the 'fabrication' of non-farm payroll data. In May, it was revised down from 144,000 to 19,000, and in June from 147,000 to 14,000. However, this is actually a signal of real economic weakness, which is beneficial for interest rate cuts expected in September. The market is mainly concerned about data fabrication, leading to risk-averse behavior. Another significant impact is the trade issue between China and the US. Following the last '90-day extension,' Trump's tariff policy has already shown initial effects, but China has not shown a clear willingness to make concessions, which has caused the market to worry about whether another crash will occur.
No matter what, the US stock market has indeed shown a daily drop, but fortunately, Bitcoin has not yet broken the important support level of 110,000. Moreover, the drop last night was a continuation of the previous day's decline, so we need to observe the emotional recovery over the weekend and the new actions of the Trump administration. With past experiences as a lesson, I believe there's no need to worry. Even if this wave drops further, the probability of a subsequent recovery is quite high, because Trump is a super player in the US stock market, and he cannot sit idly by while the stock market crashes. As for the market situation, Ethereum has reached 3,500 USD, which is also a relatively important support level. We can first look at Bitcoin; if Bitcoin breaks below 110,000, the following market will be relatively pessimistic. If there are high-position reductions, one can buy in during the pullback process. Looking back, this wave of market activity is also a failure to break through Ethereum's resistance level, but I believe that since we have held on until now, we should not give up easily.
Thank you for your attention and likes.