Daily News | Fed's Interest Rate Reduction Expectations Strengthen, Crypto Market Trends Still Unclear

2024-08-22, 04:38

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## Crypto Daily Digest: Vitalik “forced” to publicly call for ETH, Layer 2 Network Trading Volume Decreases Significantly
According to Farside Investor data, the overall inflow of US <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> spot ETFs was about $39 million yesterday, with most ETFs having small inflows.

Yesterday, the overall outflow of funds from the <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> spot ETF was around $18 million. The overall trading volume of the Ethereum ETF was relatively small, and the inflow of funds was also relatively small. ETH ETF's performance fell far short of expectations.

**Federal Reserve meeting minutes: “vast majority of members” believe September rate cut may be appropriate**

According to the minutes released by the Federal Reserve yesterday evening, the "vast majority of members" believe that a rate cut in September may be appropriate. The upward risk of inflation has been reduced. Almost all members believe that the decline in inflation will continue. But the risk of employment downturn is considered to have increased. Many participants pointed out that relaxing policies too late or too little may excessively weaken economic activity or employment.

After the Federal Reserve released its meeting minutes, Bitcoin rebounded again above $60,000 and is now priced at $60,031. According to market data, after the Federal Reserve released its meeting minutes, the US dollar index (DXY) fell below 101, approaching its low at the beginning of the year.

**ZKsync Era network revenue decreased by 90% after airdrop, with less than $7,000 in revenue last Sunday**

According to data from The Block, the Layer 2 scaling solution ZKsync Era plummeted after an airdrop on June 24, with revenue dropping to only $6,800 last Sunday, in sharp contrast to its peak of $746,000 in daily revenue before the airdrop (a drop of 99.088%). In addition, this airdrop has caused a large-scale loss of users and liquidity on the network, with daily transaction volume dropping from a peak of 1.8 million to only 200,000.

The Block stated that this situation has not only occurred in ZKsync Era, a Layer 2 project, but the GML2 index tracking Layer 2 tokens has fallen by 66% from its peak in March, indicating that the entire industry is facing challenges. The downward trend after airdrops has raised doubts about the effectiveness of token allocation strategies in the current market environment. Although airdrops aim to reward early adopters and guide network effects, they seem to increasingly trigger short-term speculation followed by rapid selling.

**Ethereum co-founder Vitalik “forced” to publicly call for ETH**

Yesterday, Vitalik Buterin, co-founder of Ethereum, posted on social media that many people always advise him to post less "philosophical thoughts" and more "bullish views" on Ethereum. Therefore, he posted this tweet.

Subsequently, Vitalik Buterin stated that this "bullish Ethereum" tweet only took three minutes and has surpassed his just published 11,700 word philosophical blog post in terms of interaction.

## Market Trends: BTC Breaks $61,500, FTM and MATIC Perform Impressively in Coin Swap Concepts
### Mainstream Coins
BTC briefly broke through $61,500 this morning, but although it later fell back, it is still near the middle of the daily Bollinger Bands. The trend in the coming days needs to be closely monitored, especially whether it can stabilize at this critical technical position.

ETH is currently experiencing narrow fluctuations around $2,600 and has not been able to break out of an independent market trend. Although ETH spot ETFs have attracted some market attention, there has been no significant increase in capital inflows, and it is difficult to see a significant rise in the short term.

The overall trend of Altcoins has followed the general rise of the market, with <a href="/price/fantom-ftm" target="_blank" class="blog_inner_link">Fantom</a> (FTM) and <a href="/price/polygon-matic" target="_blank" class="blog_inner_link">Polygon</a> (MATIC) performing particularly well, becoming the mainstream Altcoins with the best gains.

### Data Indicators
AHR999 Index: Today's index is 0.7, a significant increase compared to yesterday. This indicates that the market's long-term confidence in Bitcoin has increased.
Fear & Greed Index: Currently it is at 39, indicating a slight improvement in market sentiment, but still in the “fear” zone. This means that investors remain cautious about the market outlook.

### Market Hotspots:
Fantom: FTM has seen a 24-hour increase of over 20%, making it the best performing public chain token. On the news front, FTM is about to be swapped for the native token S of EVM's public chain Sonic, with a 1:1 swap ratio. The upgrade of Sonic is Fantom's most important narrative, and the market has responded positively to it.

Polygon: MATIC 24-hour increase: nearly 15%, performing outstandingly among the top 20 tokens in terms of market capitalization. As the earliest mainstream Layer2 concept project in the market, MATIC achieved a thousand fold increase in the previous bull market and currently has a circulation rate close to 100%. MATIC will begin the conversion to POL tokens on September 4th, making POL the primary gas token for the Polygon network.

## Macroeconomics: The three major US stock indices collectively closed higher, with expectations of a Federal Reserve interest rate cut heating up
The three major indexes of the US stock market collectively closed higher, with the S&P 500 index rising 0.42% to 5,620.85 points; The Dow Jones Industrial Average rose 0.14% to 40,890.49 points; The Nasdaq index rose 0.57% to 17,918.99 points.

Among the popular US stocks, Apple fell 0.05%, Nvidia rose 0.98%, Microsoft fell 0.16%, Google C fell 0.79%, Google A fell 0.80%, Amazon rose 0.69%, Meta rose 1.60%, TSMC fell 0.36%, Tesla rose 0.98%, and AMD rose 0.90%.

The minutes of the Federal Reserve meeting showed that Federal Reserve officials were strongly inclined to cut interest rates at the September policy meeting last month, with several officials even willing to immediately reduce borrowing costs. Federal Reserve officials kept interest rates unchanged at the FOMC meeting last month, but opened the door for a rate cut at the September 17-18 meeting. The minutes show that at the July meeting, the "vast majority" of policy makers "believed that relaxing policies at the next meeting may be appropriate if the data continues to match expectations.

They also pointed out that "many" Federal Reserve officials believe that the stance on interest rates is restrictive, and "some attendees" believe that keeping interest rates unchanged will mean that monetary policy will increase its drag on economic activity as inflationary pressures continue to cool.

The meeting minutes also showed that although all Federal Reserve officials agreed to maintain interest rate stability in July, "several" policymakers stated that progress in reducing inflation in the face of rising unemployment "provided a reasonable reason to lower the target range by 25 basis points at this meeting, or they could have supported such a decision.

### Conclusion
The inflow of funds in the <a href="/price" target="_blank" class="blog_inner_link">crypto market</a> is not good, and BTC and ETH are still fluctuating within a narrow range. The next few days may be a critical period for the market. Despite the sluggish performance of the overall market, individual tokens such as FTM and MATIC have performed well. The minutes of the Federal Reserve meeting released last night have had a significant impact on market trends, and investors need to closely monitor Powell's speech on Friday.

<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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