Original compilation: Amber, Foresight News
Original compilation: Amber, Foresight News
In the past week or so, traditional financial markets have shown some positive signals against the backdrop of easing inflationary pressures in the United States, while the cryptocurrency market has also "followed" it and ushered in a phased recovery.
July US CPI data recorded 8.5% lower than market expectations.
The previous value released a month ago hit a record high of 9.6%. Most market participants were surprised by the violent rebound in financial markets after such poor data when the data was released, but in fact it was because the market The forward-looking pricing of "the data will not get worse", and from the results, this judgment that seems to deviate from the current data is accurate. However, as to whether the CPI will usher in an inflection point, we can only continue to observe.
From a purely "wealth destruction" perspective, this year's bear market has been more violent than any cycle in the history of cryptocurrencies. Luna's thunderstorm in May directly wiped out the total market value of 60 billion US dollars from the cryptocurrency market, and then caused a series of chain reactions in the entire ecology. The rapid plunge in the price of Bitcoin and Ethereum caused the hedge fund Three Arrows Capital to encounter a crisis. In June, the total market value of the encryption market fell again to 10 billion U.S. dollars. Many large CeFi institutions in the encryption field went bankrupt, and the market experienced a storm. Raining deleveraging.
On the bright side, it's almost impossible to see a sell-off of this magnitude any time soon, and the bottoms formed after such events tend to act as strong support going forward. This article is not a trading guide, but just looking for the high probability result of the market's next move through the clues in the market.
Macro Financial Markets and BTC500
The correlation between cryptocurrencies and traditional financial markets has reached an unprecedented level for most of this year. Traditional financial markets continued to be under pressure against the backdrop of the Federal Reserve's tightening monetary policy and increasingly severe inflation, while the cryptocurrency market was hit hard again by successive black swan events when the downward trend seemed to be coming to an end. However, as the market gradually stabilizes, risk appetite is gradually returning, and the encryption market has also shown some signs of recovery. However, I think the market will have a period of sideways shocks in the next period of time, especially for Bitcoin, the rebound may come later than those altcoins with clearer narratives.
From a technical analysis standpoint, the S&P 500, Nasdaq and Nasdaq 100 have all recently resumed bullish structures on their weekly charts, with prices now breaking out of the highs that preceded the start of the latest accelerated decline Location. Compared with the wave of rebound in April, the intensity of the current wave of rise and the "harvest" on the graphic level are clearer.
Although judging from the daily chart, the current price has reached a strong resistance area, and the market may go out of a new round of correction when it hits the first line near the high point in the second quarter, but this correction may bring an excellent ride. Chance. However, whether it is the last squat before taking off depends on the strength of this round of correction. If the S&P 500 index can hold the 4080 line, the upward momentum will continue, but once this position is lost, then this round of rebound is expected to stop there declared the end.
The market has been looking forward to Powell's ability to handle the elusive "soft landing". The Fed is still walking a tightrope under the predicament of high interest rates, high debt and high inflation. Any careless handling of monetary policy may cause serious damage. Negative impact. The recent rebound has benefited from the strong employment data and the declining CPI value. Only when these data maintain a positive momentum can the Fed gain greater flexibility in adjusting monetary policy. However, risk events such as the deterioration of the energy crisis in the euro zone, the escalation of the conflict between Russia and Ukraine, and even China's Taiwan Strait issue are difficult to be priced in advance, and these will still add uncertainty to the market. However, most people still maintain a relatively optimistic attitude towards the changing economic conditions, and most people do not think that the global financial crisis in 2008 will recur.
It is worth mentioning that the employment data of the United States in July was eye-catching. Although the market is not efficient in pricing the employment situation, after all, most people believe that the improvement in employment will lead the Fed to raise interest rates more aggressively. But I think that once the market begins to price in changes in employment indicators normally, then inflation is likely to hit a turning point due to the impact of healthy employment conditions.
important events:
August 25: Jackson Hole Annual Meeting
September 2: August non-farm payrolls
September 13: August CPI
September 15-16: ETH Consolidation
September 22: Fed rate meeting
We still have a time window of about 4-5 weeks before the Federal Reserve's next interest rate meeting. During this period, the market is likely to rebound after falling first, and use this to digest the Ethereum merger and the Fed's interest rate decision in advance. and other major risk events. If next month's non-farm payrolls and CPI data still perform well, the pullback is not expected to be strong. However, since the entire financial market is very emotional this year, it is necessary to ensure its own liquidity at this stage of still high uncertainty. In the next period of time, the market is expected to give some clearer directional signals. What we need to do at this time is to believe in our own judgment and implement it firmly.
Ethereum
Ethereum
ETH has been occupying the leading position in the entire encryption market since the CPI fell a month ago. Ethereum not only outperformed Bitcoin, but also performed significantly better than major public chains and other large-cap currencies with high market capitalization recently. Only some tokens related to mergers can keep up with the rhythm of Ethereum in the near future, such as OP, Lido and GMX.
I think that the second-tier related tokens will pay more attention to the value in the merger cycle, because Rollup needs higher activity to help Ethereum obtain a higher market price, and the OP has well confirmed this judgment. Arbitrum's future It is expected to follow the same path.
In addition, Ethereum is currently the only liquid asset that big players in the cryptocurrency market can use to bet on mergers, so Ethereum has a much better narrative than Bitcoin at this stage. Another point is that the independence of the encryption market is on the rise. After the recent rebound, the current market has clearly differentiated. As of today, many altcoins have not even regained the highs of the first rebound after the Luna thunderstorm. In contrast, the situation of Bitcoin and Ethereum is much better. This kind of scenario where Bitcoin and Ethereum lead the decline, but in the end "only" altcoins suffer a devastating blow, has not been seen many times before.
On the disk, I think that Ethereum below $1,800 is worth buying. Of course, if the price plunges again and breaks through the 1,650 line, we need to be more cautious in choosing the timing of bottom hunting. It dropped to the round mark of $1,000 again. However, as long as the first-line support of 1650 is not broken, it is almost certain that Ethereum will recover $2,000 when the merger lands in mid-September.
DOGE & SHIBA INU
Last Saturday, I received a market change reminder that SHIB broke through the resistance position. DOGE/BTC started to go flat, which means that we are about to usher in a new round of choices in the market, either the last wave of altcoins in the bear market rebound, or a new The round of explosive market will come soon. Combined with the recent market situation, I think the possibility of the latter happening will be higher.
If you look back at the short history of the cryptocurrency market, you will find that DOGE/BTC is a magical indicator that can be used to judge the entry of retail investors. In the past week or so, WallStreetBets, the Reddit community that once became popular overnight during the market round in early 2021, has become active again due to the increase in the popularity of stock discussions among several retail investors, including AMC. After the market in early 2021, I believe that the story of GameStop and Dogecoin must be no stranger. At present, there is also a dog chain in the Dogecoin ecosystem, which adds another layer of stories that Dogecoin can tell. Shiba and Gogou have almost no underlying support in terms of encryption technology innovation, DeFi or metaverse games, etc., and their rise is almost entirely driven by factors such as Meme, community FOMO sentiment, and encryption-native capital attributes. However, Dogecoin can always get ahead of each round of the crypto market market. However, history does not necessarily repeat itself perfectly, and this wave of rise may be just a counterfeit rotation in the process of a bull market rebound.
The technical graphics are also very simple. After approaching the low point last summer, the market has rebounded and has broken through the upper edge of the box where the shock has been in recent months. However, if the market falls back again in a short period of time To the inside of this box will be a bad signal, so in the short term, it is very important for the performance of this position that has just been broken and turned from resistance to support to step back and confirm.
The change of Google trend is highly correlated with the currency price, and every time the price is removed from the top, it is accompanied by the peak of Google search trend. From this point of view, Dogecoin has not yet reached the position to reverse the upward trend, and the market is concerned about it is still relatively low.
Solana
Solana is my favorite cryptocurrency in 2021. As another winner in the previous public chain competition besides BNB, it once led the last market cycle. As Ethereum transitioned to a modular network architecture and moved most of the execution On Rollup, Solana will become a representative public chain that directly handles all transactions on one layer. Solana has experienced many ups and downs in the process of development, and its very low network usage cost is still very attractive to ordinary users. The vigorous development of Solana's ecological NFT also confirms this. But because of this, the network is often abused by robots, which has caused more than one downtime and crash. In order for Solana to go further, they must develop DeFi applications. At present, Drift and Friktion on Solana have achieved some results. In addition, there are currently no high TPS game applications on Solana. It is very important whether the network can handle high-frequency small transactions like the subnet of Avalanche.
The Quic/Qos/localized fee markets implemented in Solana's latest network upgrade will help prevent congestion during peak network traffic periods and provide users with a better user experience. I like to call this upgrade Solana 2.0, and the official patch version number is 1.10.32. Quic is a protocol used by validators that will allow block producers to rate throttling bots and handle congestion that UDP cannot. Localized fee markets will work like fee markets on Ethereum, but instead of being affected globally across the entire network, fees are specific to the part that is being restricted, so this specification is made possible because Solana's runtime allows Parallel transaction processing. For example, on ETH, every time a popular NFT mint occurs, it pushes up the gas fee across the entire network, whereas on Solana the fee only spikes for users who interact with that particular mint, allowing the rest of the network to continue to operate , without pause. Stake-weighted QoS ensures that nodes are entitled to a percentage of packets delivered to the leader equal to your stake, which does not allow bots holding a high percentage or no stake at all to outrank everyone else. These changes are now broadcast logic on mainnet, so we will see in the coming months if these changes have a significant impact on the performance of the network.
In terms of technical analysis, once the $48.5 line is effectively broken through, the upper space will be quickly opened up. In the short term, it will be the most ideal buying opportunity to step back on the 40-42 support area without breaking it. However, if last week's low of $39.15 is broken, then Need to pay attention to guard against the risk of a new round of rapid decline.
Chilliz
Chilliz has been one of the most successful crypto teams implementing real-world consumer markets. They are a fintech provider that specializes in sports and entertainment companies, and some of their notable partnerships include FC Barcelona, Juventus, UFC, 13 NFL teams, and more. Many sports clubs now have their own CHZ-related tokens through their Socios.com app, which allows fans to interact with their favorite teams. The app isn't live in the US yet, but it's planned to launch soon. Most recently, they announced a partnership with FC Barcelona, detailing their $100 million investment to help support their NFT and Metaverse initiatives, and CHZ has been performing extremely strongly since early August, outperforming most ERC20 tokens currency.
Currently, CHZ exists as an ERC-20 token that fans use on Socios.com to purchase fan tokens for affiliated teams operating on their sidechain, Socios. Later this year, they will launch their own public chain, Chilliz 2.0, which will be a one-stop platform for the team to engage with fans through various decentralized applications. If they can effectively replicate their success in the US market, they can almost achieve a monopoly on most of the NFT x fan x sports market.
CHZ has recently experienced a strong rebound, and has broken through the trend line resistance that has fallen in the past year or so. The strong resistance above needs to be around $0.30. As long as the price maintains the 0.15-0.17 support area and does not break, the upward momentum will not be available for the time being. Yu.
XMON
Sudoswap, aptly dubbed by Sisyphus as the Uniswap of NFT markets, is an AMM that tries to make your jpegs more liquid. In the past year, NFT can be said to be the best choice for newcomers to the encryption market, but unless you have a vicious vision, it is difficult to consistently succeed in the NFT market.
Sudoswap allows users to trade NFTs more efficiently, and users are able to creatively build different pools with their own dedicated curves on them. sudoSwap is not a centralized marketplace that charges fees for every transaction, but a completely decentralized platform that charges no fees, providing users with an easier way to buy and sell. The main hurdle in doing so will be whether liquidity shifts, the platform's data growth trend looks good over the past month or so. In view of the fact that its sales have reached about one-tenth of OpenSea’s level after only about 30 days on the line, once the market heat returns, especially if more NFTs of game props are put into circulation by users on the platform, there will be room for sudoswap to grow in the future Still pretty impressive.
some thinking
I think the worst is over for the market, we are unlikely to see new lows before the ethereum merger, but we still need to hedge, bitcoin lacks new narratives in the short term and the market is still underperforming The current situation is undoubtedly the most suitable asset that can be used to hedge short positions. Although Bitcoin has a group of loyal believers, these people often only pay attention to the particularly long-term cycle when buying Bitcoin, and do not care about short-term fluctuations. The current situation in the macro financial market is still not good enough, but once the recession anxiety starts to subside, the liquidity in the market will return quickly. And once the market shows signs of improvement, the best options to follow up are actually Dogecoin, on-chain options, and some MEME altcoins. Of course, I also like Chilliz because he provides the best opportunity for people to connect with their favorite teams, and I would be very willing to pay for the on-chain assets launched by my favorite teams. No matter what the economic situation is, people will always enjoy competitive sports. I also paid attention to StepN before, but I didn't do too much research, and I didn't find out whether his model was sustainable. So I haven't used this App so far. I think the metaverse track is still full of alpha, because this track is still not deeply explored, but I don't intend to expand too much here, readers can pay more attention to the new projects of this track.
In the past two months, Lido Finance, OP, GMX, FOLD and other merger-related currencies have performed well, but these currencies will face a test in the future. Once the Ethereum merger is successfully completed and leads to a large-scale production reduction, there is a possibility that It may lead to a collective correction of such assets. The restart of Arbitrum Odyssey in September is worthy of attention, and LINK and SNX, which have performed well in the recent bull market, seem to have passed the most difficult stage of the bear market and gradually began to recover. However, buying Ethereum at the moment may be the option with the lowest risk. If you want a safer option, then please interact more on the second floor and wait for the new project to announce the currency issuance plan in the future.
The upcoming Jackson Hole annual meeting is expected to make the market's interpretation of future US economic data clearer, and it will also give some forward-looking signals on the adjustment of the Federal Reserve's monetary policy. These are the key points that must be paid attention to next.
Mainstream assets to focus on: ETH, SOL
Focused MEME: SHIB, DOGE
Assets with higher caps: CHZ
Moderate capped assets to watch: XMON
Options for risk hedging: BTC, APE
looking to the future
looking to the future
The current focus of the market is the merger of Ethereum that will come in the fourth quarter, but we should still broaden our thinking. Considering that the macro-financial market still has a lot of uncertainty, I don't think it is possible to predict how the US stock market will develop next. We don't need to guess the specific value of CPI, but we can analyze the possible response and decision of the Federal Reserve through some details. If we do get back into a bull market, or at least a larger bear market rally, the sector rotation we need to deal with will be completely different from what we saw in 2021, and once the trend changes, we need to find the real deal as soon as possible. A new hot track with long-term potential.
Narratives worthy of attention in the future market:
Sol 2.0 and the localized account fee market
Optimistic Rollups v2: Arbitrum Nitro and Optimism Bedrock
privDeFi: Aztec Connect, Secret Network, Penumbra, Mina + zkApps
sudoSwap & Figure Dog
Cross-chain security
Account interoperability between application chains
The rise of on-chain options
zkEVMs: Scroll vs. zkSync vs. Starknet vs. Polygon Hermez
New public chain: Aptos & Sui
xApps & Cross-chain Communication: CCIP vs. Stargate vs. Synapse Chain vs. Connext vs. Wormhole vs. IBC
Celestia & Sovereign Rollups
dyMension and RollApps vs. Rollups
Modular execution of rollups / FuelVM
Blockchain Games: Aurory, Illuvium, Treeverse, Strange Clans
EIP 4844
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