Seasonal fluctuations arrive, and the market rebound signs are still unclear | Matrixport Market Observation

In the past week, BTC has shown a downward trend, breaking through multiple key support levels of $63,000, $60,000, and $58,000, hitting a low of $57,128, with a maximum decline of 12% during the week. After hitting the bottom, BTC entered a compensatory rebound, and as of the publication of this article, BTC is fluctuating around $59,000. BTC's market dominance has strengthened, with the overall crypto market largely following BTC's fluctuations, resulting in a general decline. ETH hit a low of $2,392 last week, with a maximum retracement of 6.6%, and as of the content publication, ETH is attempting to stabilize at the $2,500 support level. (The above data is sourced from Binance spot market, September 3, 15:00)

Market Environment

The August employment report is about to be released; if labor data is weaker than expected, the Federal Reserve may seek a larger rate cut.

A rate cut by the Federal Reserve has basically become a foregone conclusion, with the latest data showing a 67% probability of a 25 basis point cut in September and a 33% probability of a 50 basis point cut (CME). On September 6, the U.S. August employment report is about to be released, and the market believes this data will influence the extent of the rate cut. If labor data is weaker than expected, the Federal Reserve may seek a larger rate cut, which would be an acknowledgment of economic weakness.

U.S. tech stocks underperform expectations, and investors tend to reduce risk exposure.

On August 28, after Nvidia's earnings report was released, market acceptance was mixed; although several investment banks raised Nvidia's target price, the buyer's market did not respond positively. On August 29, despite most tech stocks rising, Nvidia plummeted by 6.38%, with a single-day market value evaporating by $196.7 billion. By Friday's close, most star tech stocks had risen, with Nvidia up 1.5% (data from Jin10).

Although Nvidia's stock price has rebounded, doubts about the high valuations of tech stocks persist in the market and have transmitted to the crypto market (from the end of 2022 until the second quarter of 2024, there has been a strong correlation between Nvidia and BTC prices). This sentiment has suppressed the market's risk appetite, leading investors to prefer reducing risk exposure in the current environment.

Both BTC ETF and ETH ETF experienced net outflows in August.

According to sosovalue data, in August, BTC ETF had a cumulative net outflow of $94 million, while ETH ETF had a net outflow of $477.25 million. Among them, on August 23, BTC ETF saw a net inflow of over $250 million, making it the best performer in August; on August 2, it had a net outflow of $237 million, making it the worst performer in August. The amount of funds in BTC ETF has decreased since March, with Grayscale's GBTC experiencing the highest outflow, totaling nearly $20 billion this year. The market believes that the outflow of BTC ETF funds may be due to changes in Bitcoin price trends, shifts in market expectations, and regulatory dynamics.

Suggested Allocation

Historical data shows that multiple markets have performed poorly in September; not only has BTC historically had a negative return rate in September, but U.S. stocks also struggle to escape the September curse. Since 1928, September has consistently been the worst-performing month for the S&P 500 index. CME Group's data from last year indicates that in the past century, the S&P 500 index has declined in 55% of Septembers.

In the seasonal fluctuations of September, along with the steepening of the U.S. Treasury yield curve, declining yields, and a falling dollar exchange rate, investors are advised to seek robust ways to lock in profits. While maintaining caution, closely monitor large transactions and market capital flows, and allocate assets reasonably. This week, we continue to recommend a core-satellite strategy, investing the majority of funds in stable, cost-protective products while allocating a small portion for high-yield structured products (for example, 70%-80% of assets in principal-protected products and 20%-30% in relatively high-risk, high-yield financial products). By using different product combinations, strategic investments can achieve returns in a highly volatile market while managing investment risks.

Shark Fin and Trend Smart Win, as mature cost-protective structured products, can meet the public's demand for stable, principal-protected returns. Dual Currency is an effective tool to cope with market uncertainties; when used appropriately, it allows investors to lock in profits in a volatile market and reduce losses caused by market fluctuations.

As a global leading one-stop crypto financial service platform, Matrixport offers users a variety of asset management products, including dual currency investments, snowball, shark fin, trend smart win, and other structured products; quantitative strategies, passive strategies, subjective strategies, and other strategic investments. The above products support multi-currency investments with a wide range of selectable investment periods.

Disclaimer: The above content does not constitute investment advice, sales offers, or purchase offers to residents of the Hong Kong Special Administrative Region, the United States, Singapore, or other countries or regions where such offers or invitations may be prohibited by law. Digital asset trading may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.