Institutions collectively slapped themselves in the face, how will the market develop in the future?

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Azuma
1 weeks ago
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In this big macro week, the focus will be on CPI on Wednesday and interest rate decision on Thursday.

Institutions collectively slapped themselves in the face, how will the market develop in the future?


Original | Odaily Planet Daily

Author | Azuma

Institutions that are collectively bullish

Turning the clock back to last week, this was the period when institutions had the most consistent bullish expectations since the market entered the adjustment phase in March.

  • On June 3, Bitfinex said in a statement that Bitcoin’s decline since March may have been caused by long-term holders selling, but on-chain data showed that the trend had stagnated and investors were accumulating Bitcoin.

  • On June 4, CryptoQuant pointed out in a report that 50% of the long-term Bitcoin supply is in an inactive state. There has been no movement or change in the Bitcoin holdings in the wallets tracked by the agency. This is considered a strong long-term holding signal that may indicate further price increases.

  • On the same day, Matrixport officially published a post on the X platform stating that as market sentiment turned bullish, Bitcoins funding rate has been positive in the past few weeks. Futures contract trading positions have also increased in the past 24 hours, indicating that fast traders (futures traders) expect Bitcoin to continue to rise.

  • On June 5, 10x Research made a high-profile prediction in its market analysis text, predicting that Bitcoin will hit a new historical high next week (this week), and the price may exceed US$73,500.

  • On June 7, Arthur Hayes, the founder of BitMEX, which has a good track record in the past, also wrote that the cryptocurrency bull market is awakening and it is time to redeploy excess US dollar liquidity to altcoins.

Obviously, the market trends in the past few days have once again proved the unpredictability of the market.

A falling market

Since the evening of June 7, the cryptocurrency market has suffered another heavy blow.

OKX market data shows that BTC has continued to fall since the evening of that day, hitting a low of 66,870.1 USDT at one point, and has fallen 3.41% in the last 24 hours; ETH fell below the 3,500 USDT mark at one point, hitting a low of 3,498 USDT at one point, and has fallen 3.96% in the last 24 hours.

The altcoin market is even more bloody. Except for a few tokens (such as PEOPLE) in a few sectors (such as Meme), mainstream coins have basically given back the gains caused by the expected surge in Ethereum spot ETFs half a month ago. As of the time of writing, SOL is temporarily reported at 153.52 USDT, a 24-hour drop of 4.05%; TON is temporarily reported at 6.87 USDT, a 24-hour drop of 3.37%; ARB is temporarily reported at 0.94 USDT, a 24-hour drop of 3.3%; TIA is temporarily reported at 8.83 USDT, a 24-hour increase of 4.06%...

Affected by the overall market downturn, the total market value of cryptocurrencies has also rapidly locked in water. According to CoinGecko data, the total market value of cryptocurrencies has now dropped to 2.58 trillion US dollars, a 24-hour drop of 3.2%.

In terms of derivatives trading, Coinglass data shows that in the past 24 hours, the entire network has liquidated $172 million, of which the vast majority are long orders, amounting to $148 million. In terms of currencies, ETH has rarely surpassed BTC to become the main liquidation position, with a total liquidation of $46.33 million, while BTC liquidation is $38.92 million.

Institutions collectively slapped themselves in the face, how will the market develop in the future?

Macro news affects the overall situation

Looking back at the market trends over the past period of time, it can be said that the trends are highly correlated with macro news.

Adam, a macro researcher at Greeks.live, also mentioned this point in last week’s market review: “This month’s BTC market is likely to be strongly correlated with the macro news of the Fed’s interest rate cut, while ETH’s trend is mainly affected by the news of ETF approval.”

Especially since last week, the successive interest rate cuts by the Bank of Canada and the European Central Bank have increased market expectations for the Federal Reserves interest rate cuts , resulting in relatively good performance in the entire venture capital market. This is reflected in the crypto market, with BTC ETF seeing positive inflows for 19 consecutive trading days, and overall market sentiment is relatively optimistic.

It is in this context that institutions have made bullish predictions one after another. However, with the release of unemployment rate data and non-farm data on the evening of June 7, which exceeded expectations, especially the new non-farm employment reached an astonishing 272,000, far higher than the market expectation of 185,000, the markets expectations for interest rate cuts this year have fallen again , and risk market sentiment, including cryptocurrencies, has suffered a blow.

QCP Capital also highlighted this situation in its latest market analysis: The unexpectedly better-than-expected non-farm payrolls and the rise in unemployment are enough to trigger risk aversion ahead of the release of US inflation data and the FOMC next Wednesday.

However, QCP Capital also predicts that this decline is a good opportunity to buy on the dip , because the market will increasingly digest the impact of at least one rate cut from the Federal Reserve from now on. As other countries around the world continue to cut interest rates, it will be difficult for the United States to ignore this.

Focus on interest rate decisions

Judging from the current market situation, the events with the greatest potential impact on the market this week are the CPI data to be released on Wednesday and the Federal Reserves interest rate decision expected to be announced on Thursday. The latter, in particular, can almost have a directional impact on the subsequent market.

In addition to QCP Capital mentioned above, many institutions have also reminded that we need to pay close attention to the results of the above events this week.

Adam, a researcher at Greeks.live, said that in addition to CPI and the Feds interest rate decision, the Bank of Japans interest rate decision on June 14 is also worth paying attention to. Considering that the volatility caused by the ETH ETF has completely subsided, the BTC ETF continues to flow in, and the cryptocurrency market is generally optimistic, in the short term, you can choose a price with a lower IV and appropriately purchase the current weeks call options , which is still very cost-effective.

Lin Chen, head of Asia-Pacific business at Deribit, said: There will be an FOMC interest rate meeting in the early hours of next Thursday. The press conference afterwards is very critical. It is possible that one sentence will increase the expectation of rate cuts, and BTC will soar. But generally speaking, it is likely that on Tuesday and Wednesday of next week, many institutions will sell assets for risk aversion (causing BTC to retrace), fearing that if the Feds speech is particularly dovish, BTC will fall. The most obvious opportunity is that if it falls, the bosses will quickly build spot positions or sell put options. Generally, the Feds script is that if the speech is too dovish once, it will definitely be maintained next time, and the market will rebound again.

Bloomberg analyst Ryan Weeks emphasized that if an undesirable interest rate outcome occurs, the market may be further pressured: Inflation data and the Feds outlook released on Wednesday may exacerbate concerns that interest rates will remain high for longer, which is a difficult situation for speculative assets such as cryptocurrencies.

In summary, based on the forecasts of various parties, the focus of the market this week will be on these two important data on Wednesday and Thursday. Before then, it is expected that there will be no major changes in the market.

Odaily Planet Daily will update the relevant developments as soon as possible, so please stay tuned.

Original article, author:Azuma。Reprint/Content Collaboration/For Reporting, Please Contact report@odaily.email;Illegal reprinting must be punished by law.

ODAILY reminds readers to establish correct monetary and investment concepts, rationally view blockchain, and effectively improve risk awareness; We can actively report and report any illegal or criminal clues discovered to relevant departments.

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