Weekly Market Recap(From 1st of Aug to 6th of Aug)
After the release of employment data last Friday, the Sahm rule was triggered and the FUD of recession swept through various financial assets. The stock market and BTC both suffered a very significant correction. But is this really the case?
After the employment data was released, BTC and US stocks were the first to react, with US stocks remaining volatile after opening lower on Friday. BTC dumped over the weekend and drove the Asia-Pacific stock market. But gold did not rise. Even under the dual momentum of Iran’s potential attack on Israel and recession expectations, it only fluctuated and did not price recession.
Another point that has been ignored by the market is that as a leading indicator of recession, U.S. bond yields have been inverted for a long time. The market once priced in a recession in 2023 because of the inversion of U.S. bond yields, but now ignores it at this point.
We don’t deny the recession. But we may have already been in it, and the market’s reaction was too violent, at least for BTC and Asia-Pacific stock markets. The volatile upward trend of U.S. stocks after opening lower on Monday, as well as the pullback of XAUUSD, prove this view. Therefore, from a macroeconomic perspective, we do not believe that there is room for further dumping of various financial assets, or that bullish strategies are better than bearish ones.
BTC’s performance last week showed the smallest loss compared to other tokens. And yesterday there was a long downward pin-bar. Judging from the WTA indicator, although the decline has started in the past few days, there are not many blue columns representing whales. Until yesterday, the number of blue columns increased significantly. We believe this shows that whales began to buy the bottom after BTC broke through 50000. The dump brings the ME indicator close to turning bearish.
To sum up, we believe that BTC may mainly fluctuate this week, with the probability of upwards being greater than downwards. We lower support to 52500 and resistance to 58000. If this resistance level is broken down, the next level will be 60000.
The decline of ETH is much greater than that of BTC. This may be because a large amount of ETH is staked in the protocol, which indeed increases the liquidity but the volatility. ETH has wiped out almost all of its gains from 2024, and it’s hard to imagine this in an environment where an ETH ETF is listed. But in any case, ETH also had a long downward pin-bar, and the bulls strengthened.
Judging from the indicators, there have been signs of whales participating in transactions in the past two days, which means that whales have been bottom-buying after ETH fell. The ME indicator has turned bearish.
To sum up, we believe that ETH may mainly fluctuate this week, and the downward trend is more likely than the upward trend. We lower the support level to 2400 and the resistance level to 2800.
Disclaimer: Nothing in the article constitutes investment advice. The article objectively expounded the market situation and should not be construed as an offer to sell or an invitation to buy any cryptocurrencies.
Any decisions based on the information contained in the article are your sole responsibility. Any investments made or to be made shall be with your independent analyses based on your financial situation and objectives.
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