Matrixport Market Observation: Seasonal fluctuations are coming, but signs of market rebound are still unclear

In the past week, BTC showed a volatile downward trend, breaking through multiple key support levels of $63,000, $60,000, and $58,000, hitting the bottom at $57,1128, with a maximum weekly decline of 12%. After hitting the bottom, BTC entered a compensatory rebound. As of the time of this article, BTC fluctuated at $59,000. BTC's market dominance has increased, and the crypto market has basically followed BTC's fluctuations, with an overall decline. ETH hit a bottom of $2,392 last week, with a maximum weekly retracement of 6.6%. As of the time of this article, ETH is trying to stabilize at the $2,500 support level. (The above data is from Binance spot, September 3, 15:00)

Market Environment

The August employment report is about to be released. If the labor data is weaker than expected, the Fed may seek a larger rate cut.

The Fed's interest rate cut is basically a foregone conclusion. The latest data shows that the probability of the Fed cutting interest rates by 25 basis points in September is 67%, and the probability of cutting interest rates by 50 basis points is 33% (CME). On September 6, the US August employment report will be released. The market believes that this data will affect the extent of the interest rate cut. If the labor data is weaker than expected, the Fed may seek a larger interest rate cut, which will be an acknowledgement of economic weakness.

US technology stocks performed below expectations, and investors tend to reduce risk exposure

On August 28, after Nvidia’s financial report was released, the buying and selling markets had mixed reception. Although many investment banks raised Nvidia’s target price, the buying market was not buying it. On August 29, while most technology stocks rose, Nvidia plummeted 6.38%, and its market value evaporated by 196.7 billion in a single day. As of Friday’s close, most of the star technology stocks closed higher, with Nvidia rising 1.5% (data from Jinshi).

Although Nvidia's stock price has rebounded, doubts about the high valuation of technology stocks have already existed in the market and have been transmitted to the crypto market (from the end of 2022 to the second quarter of 2024, there was a strong correlation between Nvidia and BTC prices). This sentiment suppressed the market's risk appetite, causing investors to be more inclined to reduce risk exposure in the current environment.

BTC ETF and ETH ETF both experienced net outflows in August

According to sosovalue data, in August, the BTC ETF had a cumulative net outflow of $94 million, and the ETH ETF had a net outflow of $477.25 million. Among them, the BTC ETF had a net inflow of more than $250 million on August 23, which was the best performance in August; on August 2, it had a net outflow of $237 million, which was the worst performance in August. The amount of funds in the BTC ETF has declined since March, among which GBTC under Grayscale has the highest outflow, with a cumulative outflow of nearly $20 billion this year. The market believes that the outflow of funds from the BTC ETF may be a combination of factors such as changes in Bitcoin price trends, changes in market expectations, and regulatory dynamics.

Suggested Layout

Historical data shows that multiple markets have performed poorly in September. Not only does BTC have a negative return in September, but U.S. stocks also cannot escape the September curse. September has been the worst performing month for the S&P 500 since 1928. Data from CME Group last year showed that the S&P 500 fell in 55% of Septembers over the past century.

In the seasonal fluctuations in September, as well as the steepening of the US Treasury yield curve, the decline in yields and the depreciation of the US dollar exchange rate, investors are advised to seek a stable way to lock in returns, pay close attention to large transactions and market capital flows on the basis of prudence, and allocate assets reasonably. This week, we continue to recommend the core satellite strategy, investing most of the funds in stable cost-protected products, while allocating a small part of the funds to high-yield structured products (for example, 70%-80% of assets are selected for principal-protected products, and 20%-30% are selected for relatively high-risk and high-yield financial products). Through different product combinations, use strategic investments to achieve returns in high-volatility markets and regulate investment risks.

Shark Fin and Trend Win are mature cost-protected structured products that can meet the public's demand for stable and principal-protected returns. Dual Currency is an effective tool to deal with market uncertainties. Proper use can enable investors to lock in returns in a volatile market and reduce losses caused by market fluctuations.

As the world's leading one-stop crypto financial service platform, Matrixport provides users with diversified asset management products, including structured products such as dual-currency investment, Snowball, Shark Fin, Trend Win, etc.; quantitative strategy, passive strategy, subjective strategy and other strategic investments. The above products support multi-currency investment and a wide range of investment cycles.