Daily News | Market Generally Rises, and the Probability of the Fed Cutting Interest Rates by 50 Basis Points in September Significantly Increased

2024-09-05, 04:39

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## Crypto Daily Digest: BTC ETFs had outflows for two consecutive days, traders bet on Fed's 50 basis point rate cut this month
According to Farside Investor data, there was a net outflow of $37.29 million from <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> ETFs yesterday, including a net outflow of $34.25 million from Grayscale GBTC and no inflow or outflow of funds from BlackRock IBIT.

Yesterday, the US spot <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> ETFs had a net outflow of $47 million, of which the Grayscale ETFs had a net outflow of $40 million.

**If Bitcoin falls below $57,000, the cumulative liquidation strength of mainstream CEX orders will reach $845 million**

According to Coinglass data, if Bitcoin falls below $57,000, the cumulative liquidation strength of mainstream CEX orders will reach $845 million. On the contrary, if Bitcoin breaks through $59,000, the mainstream CEX's accumulated short clearing strength will reach 570 million.

The liquidation chart shows to what extent the target price will be affected when it reaches a certain position. A higher 'liquidation column' indicates that the price will have a stronger reaction due to the wave of liquidity once it arrives.

**Trump-related crypto project WLFI white paper shows that 70% of tokens will be reserved for internal personnel**

According to the draft project white paper obtained by CoinDesk, 70% of WLFI's "governance" crypto token, WLFI, will be held by "founders, teams, and service providers," far higher than the internal allocation ratio of other well-known crypto projects. The remaining 30% will be distributed through public sales, and some funds will be used to support project operations.

Industry insiders believe that this allocation ratio is unusually high and may raise doubts. The WLF team stated that the token economics plan has not yet been finalized. The project claims to 'return financial power to the people', but token distribution shows that most of the power is concentrated in the hands of a few insiders. In addition, WLFI tokens will be non transferable, possibly to avoid violating securities laws.

It is worth noting that some Trump supporters have warned that the project may affect their election prospects and become a target for the SEC. Despite members of the Trump family playing multiple roles in the project, the white paper attempts to decouple the project from politics.

**Interest rate options traders increase their bets on a 50 basis point rate cut by the Federal Reserve this month**

Interest rate options traders have increased their bets that the Federal Reserve will cut interest rates by 50 basis points this month, reflecting increasing speculation in the market that policymakers will take proactive action to prevent the economy from falling into trouble. At present, swap contracts indicate a probability of about one-third for the Federal Reserve to cut interest rates by 50 basis points this month.

Options linked to the Guaranteed Overnight Financing Rate (SOFR) show a significant surge in open interest contracts (i.e. the number of positions held by traders) among some call contracts expiring on September 13th. September 13th was five days before the FOMC issued its interest rate statement. If this Friday's non farm payroll report and next week's consumer price index (CPI) data show that the job market and inflation are cooling down, it will be enough to prove that the Federal Reserve has reason to relax policy more quickly, and these positions will receive returns.

## Market Trends: The market generally rebounded, with the Meme sector performing better
### Mainstream Coins
After a sharp drop in BTC, it rebounded slightly from around $55,500 to around $58,500, and market sentiment briefly bottomed out, which may also be due to investors who had previously shorted liquidating their short positions;

ETH rebounded to around $2,450 following BTC, and the ETH ETFs still experienced significant outflows, with a cautiously optimistic outlook for the future;

Altcoins generally rebounded, with the Meme sector performing the best in the rebound market;

In terms of data indicators, the AHR999 index is 0.61 today, which is not far from the bottom fishing range; The Fear & Greed Index is 29, and the market is rebounding but emotions are still at the bottom.

### Market Hotspots:
Meme sector: NEIRO (ETH chain), MAGA, FIGHT, BILLY, PENG, and others have surged. MAGA and FIGHT belong to the political category of Meme coins in the US presidential election. As the debate between the two presidential candidates approaches on September 10th, the market has surpassed related concept tokens ahead of schedule. Due to its fully tradable nature, the Meme sector always outperforms other sectors in market rebounds.

DeFi sector: <a href="/price/1inch-1inch" target="_blank" class="blog_inner_link">1inch</a>, <a href="/price/aave-aave" target="_blank" class="blog_inner_link">AAVE</a>, CRV, <a href="/price/sushi-sushi" target="_blank" class="blog_inner_link">SUSHI</a>, etc. have risen. The 1inch team has been continuously buying 1inch tokens during the decline, and has purchased tens of millions of 1inch tokens since July.

## Macroeconomics: The rise and fall of the three major US stock indices are inconsistent, and the probability of the Fed cutting interest rates continues to attract attention
The three major indexes of the US stock market have fluctuated, with the S&P 500 index falling 0.16% to 5,520.07 points; The Dow Jones Industrial Average rose 0.09% to 40,974.97 points; The Nasdaq index fell 0.30% to 17,084.30 points. In addition, the benchmark 10-year Treasury yield is 3.77%, and the 2-year Treasury yield, which is most sensitive to the Fed's policy rate, is 3.76%.

Among the popular US stocks, Apple fell 0.86%, Microsoft fell 0.13%, Nvidia fell 1.66%, Google C fell 0.50%, Google A fell 0.58%, Amazon fell 1.66%, Meta rose 0.19%, TSMC rose 0.19%, Tesla rose 4.18%, and AMD rose 2.87%.

According to CME's "FedWatch", the probability of the Federal Reserve cutting interest rates by 25 basis points in September is 55.0%, and the probability of cutting interest rates by 50 basis points is 45.0%. The probability of a 50 basis point interest rate cut has significantly increased compared to last week.

### Conclusion
In the short term, Bitcoin may fluctuate within the range of $58,000 to $60,000. Although the price has rebounded, the large outflows from BTC ETFs and ETH ETFs indicate a lack of market confidence and may continue to face pressure in the short term. The strong performance of the Meme and DeFi sectors may continue in the short term, but investors need to be wary of rapid changes in market sentiment.

For long-term investors, they can pay attention to the AHR999 index and the Fear & Greed index. When these indicators indicate that the market is at a low point, it is suitable to build positions in batches; Short term traders need to closely monitor market trends and news events, especially the dynamics of the Meme and DeFi sectors, in order to find short-term trading opportunities. In the current situation of significant market volatility, it is recommended that investors set stop loss and take profit points to avoid unnecessary losses caused by market volatility.

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<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.
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