Matrixport Market Observation: The butterfly effect of the yen rate hike has caused the global market to collapse, and t

Market Trends

In the past week, BTC has been falling from above $66,000. After falling below the two key support levels of $65,000 and $60,000 on August 1 and August 4, it entered a panic-like decline on August 5. Binance spot data shows that the largest single-day drop of BTC on August 5 was 17%, and BTC once fell to $49,000. Affected by the drastic market fluctuations, more than 200,000 people were liquidated on August 5, and the liquidation amount exceeded $1 billion. As of press time, the price of BTC has gradually rebounded and stabilized at around $55,000.

As BTC prices fell, other crypto assets basically followed suit. ETH even showed a tendency to lead the decline. On August 5, ETHs largest daily drop was as high as 23.85%, reaching $2,111, close to the lowest level since the beginning of 2024. As of press time, the price of ETH fluctuated around $2,500.

Market Analysis

This extreme market situation was mainly affected by several major factors. Macroeconomic factors were obviously bearish, and liquidity stampede caused multiple markets to plummet one after another; the pressure of crypto regulation increased, and the selling pressure in the crypto market amplified panic sentiment.

Japan raises interest rates and shrinks its balance sheet, and global capital carry reverses

The long-term slump of the yen provides liquidity for capital arbitrage in the global market, and the market believes that the Bank of Japan will have multiple interest rate hikes. The Bank of Japans interest rate hike and balance sheet reduction operations have led to a sharp rise in the yen exchange rate, and global capital has passively deleveraged, selling various assets to repay yen debts. At the same time, large Japanese companies are basically export-oriented companies, and the sharp rise in the yen has also led to a decline in profits for large companies, and bearish sentiment is obvious. Since the U.S. stock market is deeply affected by the yen exchange rate, it is also the most affected by asset selling.

The risk factors of US economic recession are superimposed, and market sentiment is depressed

Last weeks non-farm data fell far short of expectations, with the unemployment rate soaring to 4.3%. The SP 500 fell to its lowest point since October 2022 (August 5 data) after weak employment data. The U.S. labor market is getting weaker, and Goldman Sachs has raised the risk of a U.S. recession next year from 15% to 25%. Market concerns about the Feds monetary tightening cycle have intensified sentiment for a recession. Coupled with the worsening situation in the Middle East leading to increased geopolitical instability, the earnings reports of large technology companies released last week did not give the market a shot in the arm.

Market selling pressure, JUMP may sell assets due to regulatory pressure

Since yesterday, the information that JUMP is selling ETH has spread like wildfire in the market. Information shows that JumpTrading has redeemed 83,000 wstETH into 97,500 ETH in the 9 days since July 25. Among them, 66,000 ETH (about 191 million US dollars) have entered the trading platform. This information has aggravated the panic in the market, and the selling pressure has caused the price of ETH to continue to bottom out. Yesterday, the entire crypto market liquidated more than 1 billion US dollars. The market liquidation has also intensified the selling pressure, causing a spiral decline.

Recent Hot Topics

Harris wins Democratic presidential nomination, Democratic meeting to repair crypto ties postponed

U.S. Vice President Harris officially won the Democratic presidential nomination, becoming the first black woman and Asian American to lead a major U.S. political party presidential candidate. This election has officially become a showdown between Harris and Trump. Harris will attend a meeting to repair crypto relations and postpone it to later this week.

The Reserve Bank of Australia kept interest rates unchanged at 4.35%, in line with market expectations

The Reserve Bank of Australia is determined to restore the consumer price index (CPI) to the target level and needs to remain vigilant to the upside risks of inflation. Inflation remains above the target, showing persistence. Core inflation levels are still too high and necessary measures will be taken to achieve the inflation target. In addition, core inflation is expected to slow more slowly than previously expected and is expected to fall below 3% by the end of 2025. At the same time, the forecasts for GDP growth, unemployment rate and core inflation have been raised.

Suggested Layout

Affected by the extreme bottoming market, it is not ruled out that the crypto market will have a short-term recovery and rise in the near future . However, it should be noted that due to the market selling pressure and the uncertainty of macro factors, the subsequent market fluctuations may be more drastic. It is recommended to balance asset allocation and pay more attention to rational income allocation . Shark Fin and Trend Win have both cost protection and profit-making product functions, which may be a good choice.

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Disclaimer: The above content does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy to residents of the Hong Kong Special Administrative Region, the United States, Singapore, and other countries or regions where such offers or solicitations may be prohibited by law. Digital asset trading may be extremely risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.

This article is sourced from the internet: Matrixport Market Observation: The butterfly effect of the yen rate hike has caused the global market to collapse, and the crypto market may enter a recovery and rise

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