Matrixport Market Observation: Nasdaq Declines, Yen Strengthens, Clear Risk Aversion in the Market

Recently, the cryptocurrency market has become relatively calm, lacking new market catalysts. Influenced by MSTR's intention to purchase more BTC, BTC returned to an upward channel in the middle of last week, reaching a high of $99,475 on the evening of the 21st, with a weekly increase of 6.5%. However, a black swan event occurred when Bybit was hacked, resulting in the theft of over $1.46 billion worth of ETH, marking the largest security incident in the current crypto space. The market's panic intensified, leading to a large number of long stop-losses on Bybit, and the market stabilized after the decline.

Affected by U.S. tech stocks, the S&P and Nasdaq closed lower, while the yen continued to strengthen against the dollar, indicating a clear risk-averse sentiment in the market. BTC briefly fell below $89,000 and is currently quoted at $89,400 (data from Binance spot).

Market Analysis

Tech stocks collectively weakened, and the yen strengthened against the dollar, triggering market risk aversion

The news that "Microsoft has canceled its data center leasing plans" has sparked discussions on Wall Street regarding the outlook for AI investments. Against the backdrop of unresolved issues such as tariffs, most large tech stocks weakened collectively, with Nvidia falling over 3%, Tesla and Meta down over 2%, and Amazon and Microsoft down over 1%, while Apple saw a slight increase. At the close, the S&P 500 index fell by 0.5%, the Nasdaq Composite index dropped by 1.21%, and the Dow Jones Industrial Average rose by 0.08%.

As the market bets on the Bank of Japan raising interest rates, the yen has risen nearly 6% in six weeks, with the current yen to dollar exchange rate at 149.38, and it is expected to challenge the near three-month high of 148.84. Market risk aversion surged, with BTC briefly falling below $89,000 on the 25th, and the market fear and greed index indicating extreme fear. International gold prices reached a new historical high, with COMEX gold futures rising by 0.49%, having previously surged to $2,974 before the U.S. stock market opened.

ETH faces significant downward pressure, continued declines may lead to a prolonged weakness in the altcoin market

The hacker from Bybit still holds some ETH, and the market generally believes that this asset will impact ETH prices. Meanwhile, there were previous expectations that Bybit would purchase a large amount of ETH in the open market, but this assumption has proven incorrect. As a result of this information, ETH leveraged positions have decreased, and on the 24th, the open interest in ETH futures significantly reduced. Currently, ETH is quoted at $2,394, approaching a critical support level. The strengthening yen has also exacerbated ETH's price volatility; if ETH continues to decline, it may trigger a chain reaction throughout the entire altcoin market.

Market Highlights

Nvidia's earnings report on Thursday is highly anticipated, and the January Personal Consumption Expenditures (PCE) index is also a market focus

The market is eagerly awaiting Nvidia's earnings report to be released this Thursday, as its financial results and outlook have significant potential implications for the entire AI supply chain.

Additionally, the January Personal Consumption Expenditures (PCE) index, set to be released this Friday, is also a focal point for the market. It is the Federal Reserve's preferred inflation indicator. Federal Reserve official Goolsbee stated that amid government policy adjustments, the Fed should remain "cautious." He still believes that interest rates will decline after a period of uncertainty and considers the impact of rising consumer inflation expectations to be minimal, expressing satisfaction with the Fed's progress toward achieving the 2% inflation target.

Crypto regulation is improving, OKX Seychelles reaches a settlement with the U.S. Department of Justice

On the 22nd, Coinbase's Chief Legal Officer Paul Grewal announced that the U.S. SEC has agreed to withdraw its lawsuit against Coinbase and cannot refile it. Coinbase has paid $50 million in legal fees for this case. On the 25th, Aux Cayes FinTech Co. Ltd. (OKX Seychelles), a subsidiary of OKX, announced a settlement with a U.S. Department of Justice investigation, admitting that the company conducted remittance business in the U.S. without permission. To reach this settlement, the company agreed to pay an $84 million fine and forfeit approximately $421 million in revenue obtained from U.S. customers during this period.

The market generally believes that cryptocurrency regulation has gradually improved since Trump's administration. According to Fox Business reporter Eleanor Terrett, given the SEC's recent focus on staking businesses, the agency may reconsider its lawsuit against ConsenSys regarding its MetaMask staking service from last year. Additionally, the SEC had previously accused ConsenSys of engaging in unregistered brokerage activities, but this accusation has now been withdrawn, similar to the charges dismissed in the Coinbase lawsuit.

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