Daily News | Market Oversold Rebounded, Short-term Market Trend Will Continue to Fluctuate Widely

2024-08-06, 04:51

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## Crypto Daily Digest: BTC and ETH have rebounded significantly, but the market still lacks sustained capital inflows

According to Farside Investor data, the net outflow of <a href="/ar/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> spot ETFs last Friday was $168 million, with BlackRock experiencing a rare absence of inflows and outflows.

The net outflow of ETH ETF was $48 million, mainly from Grayscale ETHE, while other ETH ETFs only had some small transactions.

**<a href="/ar/price/bitcoin-btc" target="_blank" class="blog_inner_<a href="/ar/price/link-ln" target="_blank" class="blog_inner_link">link</a>">Bitcoin</a> contract holdings plummet by over 30% to $25.8 billion**

According to Tide Capital, the holdings of Bitcoin futures contracts across the internet have dropped to $25.8 billion, a decrease of over 30%, and funding rates have significantly turned negative. Many leveraged long positions have been liquidated, and market trading volume has increased significantly. The fastest period of market decline may have ended.

**Global stock markets rebound, Japanese stock market violently rebounds by 10%**

After a general decline in the risk asset market yesterday, US stock index futures continued to rise, with the Nasdaq futures up 2%, S&P 500 futures up 1.5%, and Dow Jones futures up 1%. Japan's Eastern Stock Exchange futures triggered a circuit breaker mechanism upwards, with South Korea's KOSPI index expanding its gains to 5% and the Nikkei 225 index expanding to 9.7%.

Regarding cryptocurrencies, Bitcoin rose 3.83% and <a href="/ar/price/<a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">ethereum</a>-eth" target="_blank" class="blog_inner_link">Ethereum</a> rose 5.05%.

**Data: Crypto Fear and Greed Index fell to 17 today, hitting a new low in the past two years**

According to Alternative data, the crypto fear and greed index fell to 17 today (compared to 37 yesterday), indicating that the market is currently in extreme fear, and the index has hit a two-year low.

## Market Trends: The overall market rebounded significantly, but the outlook for the future is still not optimistic
Yesterday, BTC (Bitcoin) opened a wave of upward trend after falling below $50,000 twice within the day, reaching a high of $56,000, showing a wide range of fluctuations overall. However, the BTC spot ETF still experienced a large net outflow of $168 million, indicating that the current rise is likely only a short-term oversold rebound, and market sentiment remains cautious. The market may need time to recover in the short term.

ETH fell to $2,100 at one point yesterday, and Jump Trading is suspected of clearing its ETH position, which has had a certain impact on market sentiment. However, ETH rebounded with the market, and the price rose above $2,500. The outflow limit of ETH spot ETF has significantly decreased, and the overall trading volume is also relatively small, indicating that the market's sentiment towards ETH has eased.

Although altcoins generally follow the market rebound, the currency's rise has not been significantly led by it, and its overall performance is relatively stable.
### Data Indicators
Today, the AHR999 index is at 0.57, getting closer to a bottom fishing index, indicating that the market may be gradually approaching the bottom zone. The Fear & Greed Index is 17, indicating that market sentiment is still in extreme fear and is expected to continue for some time.
### Market Hotspots:
BTC ecosystem: BTC has risen more than 10% from its intraday low, while other related tokens such as SATS, BAKE, and BADGER have performed well. Among them, SATS is the most dominant mainstream altcoin in the market, with a intraday low point rise of over 50%. In addition, Unisat will release BTC layer 2 in September, which is a positive factor for market news and may further promote the development of the BTC ecosystem.

Meme sector: Some tokens in the Meme sector experienced a drop of over 30% during the day, but most have rebounded along with the market. MIGGLES has performed particularly well, rising nearly 100% from the intraday low; POPCAT has increased 60% from its intraday low; WIF rose almost 30% from its low point, while PEPE rose 25% from its low point. Overall, the larger the market value of Meme coins, the smaller the rebound, indicating that more market funds are flowing towards smaller Meme coins.

AI sector: TAO and ARKM have surged, indicating that the market still has a certain level of attention to the AI sector. However, the AI leader NVIDIA in the US stock market has continued to decline recently, and its founder has been continuously cashing out and leaving, which lacks market hot spot stimulation for the short-term market of the AI sector.

## Macroeconomics: The stock market rebounded after a sharp decline, and expectations for the Federal Reserve to cut interest rates have strengthened
On Monday, under the shadow of the US economic recession and concerns about the overheated rise of technology stocks, global risk aversion surged,and assets were sold off. The Nikkei index plummeted 12%, while the Seoul KOSPI index plummeted 9%. The US stock market continues the trend of the Asia Pacific stock market crash, with the S&P and Dow Jones Industrial Average experiencing their largest single-day decline in nearly two years, with the latter falling more than a thousand points. The Nasdaq also lost more than 3%, and large technology stocks collectively plummeted. Global stock markets have evaporated over trillions of dollars.

Some analysts believe that the market's concern about the US economic recession is the main reason for the global market collapse. Last Friday, the unemployment rate announced by the US Department of Labor unexpectedly rose to 4.3%, reaching its highest level since October 2021 and triggering the Sam's Rule. Based on historical experience, the “Sam's Rule” has been validated in all nine US economic recessions since 1960. However, the Federal Reserve still chose to maintain the central bank interest rate at its highest level in 20 years last week, and investors are concerned that the central bank may be too slow to relax monetary policy.

After experiencing a global collective crash on Black Monday, the Japanese and South Korean stock markets began rebounding on Tuesday. The Nikkei 225 Index and the Tokyo Stock Exchange Index rebounded by over 8%, the largest increase since October 2008, as export companies such as technology companies and car manufacturers surged after the yen fell about 1% against the US dollar. Nikkei 225 Index futures rose 8%, hitting circuit breakers upwards. Bank stocks surged 10% after a 17% drop on Monday. All 33 sector indices of the CSI Index have risen. The Japanese yen fell more than 1% against the US dollar, ending the momentum of five consecutive days of accelerated yen appreciation after the Bank of Japan raised interest rates last week.

Hideyuki Ishiguro, Chief Strategist of Nomura Asset Management, said, “The panic selling may have ended. However, due to the increasing global market anxiety, today's price trend may be like a roller coaster ride.”
### Conclusion
The overall market sentiment is relatively cautious at present. Although BTC and ETH have rebounded, the outflow of large amounts of funds and extreme fear of market sentiment indicate that this rebound may only be a short-term oversold rebound, and the market still needs time to recover in the short term. Although the Altcoins and Meme sectors have rebounded, their performance could be stronger. Investors need to remain vigilant and wait for market sentiment to stabilize further.

<div class="blog-details-info">
<div>Author:**Icing**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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