Crypto Market Pulse - July 29, 2024
LAST WEEK RECAP:
- Spot ETH ETF starts trading on Tuesday, and the total net outflow is $341M for the first week.
- Trump proposed a strategic national crypto stockpile and said, 'Never sell your bitcoin' at the Bitcoin conference.
- U.S. PCE was 0.1% MoM, in line with estimates, the annual rate is 2.5%, slightly higher than 2.4% est.
- U.S. core PCE increased 0.2% MoM, same as estimates, the annual rate is 2.6% v.s. 2.5% est.
- U.S. GDP increased at a 2.8% annualized pace in Q2, much more than 2.1% forecast.
- Tesla's BTC holdings remained unchanged in Q2.
- Jersey City pension fund plans to invest in BTC ETFs.
- SOL flips BNB to become the 4th biggest crypto.
LEGACY MARKETS – DXY
DXY has been trending down, with market expectations increasing on the first cut in September. If we see further trending down to the 100-103 level with this week's FOMC commentary and job number, it will add more tailwind to the equity and crypto markets.
LEGACY MARKETS – VIX
VIX moves higher with the recent volatility in the U.S. equity market due to big tech earnings and rotation into smaller-cap assets. With upcoming mega 7 earnings, VIX likely remains at a higher level, which may add pressure to the crypto market in the short term.
BTC WEEKLY VIEW
BTC's price is still primarily influenced by U.S. election-related policies and the increasing BTC distribution from Mt. Gox. The short-term tailwind peaked with Trump's speech at the Bitcoin conference. Next as the Mt.Gox distribution to creditors increases, we can more clearly see its impact in the coming weeks.
ETH WEEKLY VIEW
The net outflow situation in ETH ETF closely mirrors what happened following the trading debut of the BTC ETF. ETH ETF inflows are likely to improve once the selling pressure from Grayscale reaches equilibrium.
ETH/BTC
ETH/BTC continues its weakness with more positive BTC ETF inflows and U.S. election related narratives, while the initial ETH ETF outflow has put pressure on ETH price action. With more Mt.Gox distribution going and ETH ETF inflow likely becoming better after Garyscale's ETHE selling reaches the equilibrium, there is a decent chance that ETH/BTC can play catch-up.
TOTAL3 USD MARKET STRENGTH
Although a few alts are also showing strong performance, current liquidity is still concentrating on the BTC and ETH; the broad market level alt rebound will likely happen when more liquidity is injected into market along with Fed cut.
TOTAL3 BTC MARKET STRENGTH
TOTAL3/BTC is still in downward channel with recent liquidity concentration on BTC and majors. As the equity market has already started rotation from mega 7 to small caps as investor risk appetite increases, some liquidity might enter alts but still needs time.
SUMMARY
- In Q3, BTC's price is still primarily influenced by U.S. election-related policies and the increasing BTC distribution from Mt. Gox. This tailwind has reached a short-term peak with Trump proposing a strategic national crypto stockpile and stating, "Never sell your bitcoin" at the Bitcoin conference. Mt. Gox side, as the distribution to creditors continues increasing, more clearly impacts can be seen soon.
- The net outflow situation in ETH ETF closely mirrors what happened following the trading debut of the BTC ETF. ETH ETF inflows are likely to improve once the selling pressure from Grayscale reaches equilibrium.
- The investors will be watching this week's FOMC meeting and Friday's job report, which will justify the market's expectation of the Spet cut.
DISCLAIMER:
The information in this report is for information purposes only and is not to be construed as investment or financial advice. All information contained herein is not a solicitation or recommendation to buy or sell digital assets or other financial products.
This post was prepared by Kairon Labs Trader Patrick Li and Joshua Van de Kerckhove
Edited by: Marianne Dasal
Kairon Labs provides upscale market-making services for digital asset issuers and token projects, leveraging cutting-edge algorithmic trading software that is integrated into over 100+ exchanges with 24/7 global market coverage. Get a free first consult with us now at kaironlabs.com/contact