Matrixport Market Observation: The Crypto Market Lacks Catalysts, Beware of the Risk of a Pullback After BTC's Technical Rise

In the past week, BTC experienced a maximum drop of 12% during the week, falling to $52,550 on September 7, and then entering a technical correction. After breaking through $58,000 on the morning of September 10, it retraced and is currently fluctuating around $57,000 (the above data is sourced from Binance spot market, September 10, 16:00). Limited by the current lack of catalysts related to BTC, the main catalyst is basically related to the FOMC interest rate decision, and BTC lacks strong market driving force. Although BTC prices rose this week, based on the current perpetual contract financing rates and futures basis, investors are advised to cautiously assess market trends and be aware of the risk of pullbacks.

Market Environment

This week's inflation data may further drive Federal Reserve decisions

The Consumer Price Index (CPI) and Producer Price Index (PPI) for August will be released this Wednesday and Thursday. This inflation report will provide further information for the Federal Reserve's decision at the next Open Market Committee meeting. According to the CME Group's FedWatch Tool data, the market now predicts a 71% chance that the Federal Reserve will cut interest rates by 25 basis points at the next meeting, with only a 29% chance of a 50 basis point cut.

Market buying on dips drives European and U.S. stock markets to rise yesterday

As of the close on September 9, both European and U.S. stock markets rose, with the Dow Jones Industrial Average gaining over 500 points and the Nasdaq briefly rising over 1%. The market believes that the stock market rebound is not influenced by news but is a normal market buying on dips driven by oversold conditions and expectations of monetary policy.

Harris will have her first debate with Trump, and no mention of cryptocurrency-related topics in public information

According to ABC News, the first presidential debate between Harris and Trump will be held on September 11 at 9 AM at the National Constitution Center in Philadelphia, and will be broadcast live on ABC News Live, Disney+, and Hulu. Harris's campaign website has released a list of proposed policy positions for her future presidential administration, which does not mention cryptocurrency-related topics. However, Harris has promised to support the development of the artificial intelligence industry and emphasized the importance of nurturing "other cutting-edge industries of the future."

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The Federal Reserve's interest rate cut has become a foregone conclusion, but concerns about the U.S. economic recession have reduced the driving force of this catalyst. In August, the VIX index, which measures market volatility, surged above 65, a level that has historically only occurred twice, during the COVID-19 pandemic and the 2008 global financial crisis. Investor concerns about a potential economic recession have outweighed the long-awaited positive expectations of interest rate cuts.

At the same time, a comprehensive view of current market indicators shows a decline in demand for bullish trading, a general lack of interest among investors in long-term directional exposure to Bitcoin prices, and a cautious attitude among traders regarding current positions. In this context, investors are advised to reduce reliance on a single market, diversify and allocate assets reasonably (satellite strategy) to cope with potential short-term market fluctuations. Meanwhile, under the premise of market adjustments, long-term investors can closely monitor mid- to long-term opportunities in the market, but must also pay attention to risk control, and may consider allocating some stable cost protection products to ensure basic returns while earning interest on holdings.

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