Matrixport Research: The market awaits new catalysts, BTC may continue to consolidate

The market has recently entered an adjustment phase, with BTC momentum weakening and both funding and trading activity cooling down. Data shows that trading volume has shrunk and funding rates remain low, leading to a loosening market structure. Meanwhile, seasonal disturbances in August, combined with external uncertainties, have made short-term sentiment noticeably cautious. From a technical perspective, $112,000 served as a support level during the initial pullback of this round, but the subsequent rebound has been weak, and this support level is likely to face another test.

Macroeconomic Data Below Expectations, Risk Assets Overall Decline

Overall employment data is weak (unemployment rate rising from 4.117% to 4.248%), indicating a slowdown in the job market. The U.S. Bureau of Labor Statistics also released the largest two-month employment data revision in recent years (excluding the pandemic period) (-258,000). The ISM manufacturing employment index has dropped to its lowest level since the second quarter of 2020, and since Trump's election in November last year, the ISM manufacturing index has remained in contraction territory for all but two months. Although manufacturing's share of the current U.S. economy is relatively low, historical experience shows it remains an important leading indicator reflecting weak economic fundamentals. The current weakness may partly stem from prolonged tariff negotiations, but it also reinforces the judgment that certain sectors of the U.S. economy are facing substantial slowdowns.

Even more unexpectedly, after the implementation of Trump's tariff policy in April, even key non-ISM manufacturing indicators failed to show substantial expansion. Although this indicator remains above the recession threshold, the extent of expansion has been limited, raising concerns about sluggish U.S. economic growth.

BTC ETF Enters Inflow Mode After 6 Days of Net Outflow, Market Liquidity Improves

After six consecutive days of net outflow (July 31 - August 5), the BTC ETF entered a net inflow mode on the 6th, with a single-day net inflow of $277 million on August 7; the ETH ETF saw a market net inflow of $222 million on the same day. This is due to the cooling of risk assets, with a noticeable outflow of funds from the market since last week, but this week has seen some alleviation.

It is noteworthy that as institutions position themselves in crypto assets like BTC and professional investors gradually enter the market, liquidity has significantly improved, and the correlation of BTC price volatility with ETF inflows and outflows has decreased. Therefore, despite the speed and scale of ETF fund outflows last week, the crypto market did not experience the kind of severe sell-off seen before the ETF exits.

The Market Awaits New Catalysts, BTC Price May Continue to Consolidate

As the Federal Reserve has yet to release clear signals, even if the market believes "the probability of a rate cut in September has increased," the market may continue to maintain a wait-and-see attitude. With most positive factors already priced in, investors are waiting for new catalysts. In the very short term, oversold stochastic indicators may suggest the possibility of a technical rebound, but it cannot be ruled out that BTC prices will continue to consolidate sideways.

"The repricing of U.S. economic growth expectations and whether it will trigger a rebound in actual volatility" is currently a hot topic of concern. As volatility continues to decline, the net asset value (NAV) of some publicly traded companies holding large amounts of BTC has contracted, weakening their ability to raise funds through issuing new shares and further increasing their BTC holdings. Although these companies have recently become the focus of market attention, the key factor suppressing this round of market activity actually comes from the continued selling pressure of early investors.

Disclaimer: The market carries risks, and investment should be approached with caution. This article does not constitute investment advice. Trading in digital assets 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.