Daily news| Bitcoin and Ethereum Spot ETFs See Minor Net Outflows Yesterday; Probability of a 50 Basis Point Fed Rate Cut Increases; EigenLayer's Second Season Airdrop Begins

2024-09-17, 03:52

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##Crypto Daily Digest: Bitcoin and Ethereum Spot ETFs See Minor Net Outflows Yesterday; Probability of a 50 Basis Point Fed Rate Cut Increases; EigenLayer's Second Season Airdrop Begins
###Spot ETFs: Both Bitcoin and Ethereum spot ETFs saw minor net outflows. 
According to Coinglass data, on September 16, U.S. <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> and <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> spot ETFs had net outflows of $3 million and $13.6 million, respectively.

###EigenLayer: The second season of airdrop claims is expected to continue until March next year.
The Eigen Foundation announced on the X platform that the second season of airdrop claims will last from September 16, 2024, to March 16, 2025. They will also launch a programmatic incentive plan, distributing EIGEN weekly to reward stakers and operators.

###If Bitcoin falls below $56,000, the cumulative long liquidation pressure on major CEXs will reach $487 million. 
Conversely, if it breaks above $60,000, the short liquidation pressure will reach $526 million.

###DeltaPrime suffered a private key leak, resulting in an estimated loss of $5.9 million.
Beosin Alert detected a suspected private key leak in the DeltaPrime project, leading to malicious upgrades of several critical contracts and resulting in the theft of approximately $5.9 million in assets.

###CME "Fed Watch": The probability of a 50 basis point rate cut is higher than that of a 25 basis point cut. 
CME data indicates a higher probability of a 50 basis point rate cut by the Federal Reserve this week compared to a 25 basis point cut, with a cumulative 75 basis point cut by November being the most likely scenario.

###SEC Hearing on Crypto Regulation
The U.S. House Subcommittee will hold a hearing to discuss the SEC's politicization of digital asset regulation, with former SEC commissioners Dan Gallagher and Michael Liftik set to testify.

###MicroStrategy: MicroStrategy plans to privately issue $700 million in convertible senior notes.
MicroStrategy announced plans to privately issue $700 million in convertible senior notes, granting initial purchasers an option to buy additional notes. The notes will mature in 2028.

###Bhutan Holds a Significant Amount of Bitcoin
Arkham revealed that Bhutan is the fourth-largest government holder of Bitcoin, with 13,011 BTC worth approximately $780 million, primarily from mining operations.

###Ethereum L2 User Base Reaches a New High
The user base for Ethereum Layer 2 solutions has reached a new high, with active addresses increasing by 35.23% last week. This growth strengthens L2's dominance and accelerates <a href="/web3" target="_blank" class="blog_inner_link">Web3</a> adoption.

###CoinShares: Digital asset investment products saw inflows increase by $436 million.
CoinShares reported that digital asset investment products saw inflows of $436 million last week, attributed to shifting market expectations regarding a Federal Reserve rate cut.

##Market Analysis: Bitcoin Holds Steady on 4H Chart Amid Pre-Fed Decision Market Caution 
**General Trend: **
Bitcoin (BTC) ended last week with a 10% rebound, but this week started with a continuation of the weekend's downward trend. BTC has posted three consecutive daily declines, currently trading around $58,000. Altcoins have also followed suit with weak downward movements, showing no sustained gains. Investors are favoring short-term trades and remain cautious.
 
From a technical perspective, BTC is temporarily stable on the 4-hour chart, supported by the 60-period moving average. If this support fails, the price is likely to drop towards $55,000 for the next support level. This week, attention should be focused on the psychological resistance at $60,000 and the impact of the upcoming Federal Reserve interest rate decision.  
 
Yesterday, both Bitcoin and Ethereum spot ETFs experienced minor net outflows, which had a negligible impact on recent prices. Funds continue to favor Bitcoin over Ethereum, which has not benefited from the introduction of spot ETFs and continues to see net outflows. Over the past seven days, Bitcoin and Ethereum saw net outflows of $365 million and $243 million, respectively, among the top 20 cryptocurrencies by market cap. Ripple was the only one showing a net inflow, albeit a modest $1.33 million. This indicates a conservative risk appetite among investors, with market speculation yet to kick in.
 
From a macroeconomic view, this Thursday's Federal Reserve interest rate decision is highly anticipated. Currently, the market is betting on a 50 basis point rate cut, which has a higher probability than a 25 basis point cut. This could significantly impact the prices of risk assets like Bitcoin. While long-term improvements in macro liquidity are expected to boost bullish sentiment in the <a href="/price" target="_blank" class="blog_inner_link">crypto market</a>, short-term downside volatility is inevitable.

**Market hot spots:**
MEME Sector: Despite the broader market downturn, the MEME sector saw a 0% change in the last 24 hours. The sector's activity is buoyed by major exchanges listing tokens like Turbo, BabyDoge, and Neiro yesterday, and upcoming listings of chain games like Catizen (CATI) and Hamster Kombat (HMSTR) on platforms including Gate.io. Leading tokens in this sector, such as Turbo, BabyDoge, and Neiro, posted impressive weekly gains of 21.8%, 81.3%, and 977.8%, respectively.
Social Sector: With a current market cap of $2.3 billion, the Social sector experienced a slight 0.3% dip over the last 24 hours but maintained a 3.4% gain over the past week. Recently, the Web3 social infrastructure token UXLINK has gained support from several exchanges, generating some buzz. However, the sector's long-term development remains moderate, with the challenge of effectively integrating social networks and blockchain technology. Leading tokens in this sector, such as GAL, UXLINK, and HIVE, showed resilient performance with gains of 4.3%, 21.0%, and 0.2%, respectively.
Privacy Sector: The Privacy sector also demonstrated relative resilience over the past 24 hours, with <a href="/price/dash-dash" target="_blank" class="blog_inner_link">DASH</a>, ZANO, and OXEN posting gains of 1.0%, 1.1%, and 3.3%, respectively. Last week's performance in the Privacy sector was similarly resistant to broader market declines. However, the sector remains subdued in the long term due to regulatory pressures on privacy-focused cryptocurrencies. The recent gains are likely a result of a rebound from oversold conditions.

##Macro: Market Bets on Larger Fed Rate Cut, Bitcoin Remains Weak
The Federal Reserve is set to decide on a rate cut at its policy meeting this week, with widespread market expectations that a rate cut is imminent due to the weakening U.S. economy and looming recession fears.

Although there are varied analyses about the prospects of a rate cut, the latest data shows a significant increase in the market's expectation of a 50 basis point cut. This anticipation has driven bond yields lower and put pressure on the U.S. dollar index, creating a relatively favorable environment for the <a href="/price" target="_blank" class="blog_inner_link">cryptocurrency market</a>.

For instance, bond traders are now leaning towards the likelihood of a 50 basis point rate cut by the Fed this week, a stark contrast from a few days ago when this option was almost entirely dismissed. This rapid shift in expectations is reflected in the swaps contracts related to the Fed's rate decision, pushing the yield on two-year U.S. Treasury bonds to its lowest point in nearly two years, and dragging the dollar index to its lowest level this year.

This week's market volatility will be highly dependent on investor expectations regarding the Fed's rate cut decision. Whether the cut is 25 or 50 basis points, it will cause significant swings between bullish sentiment and cautious risk aversion. The increasing correlation between Bitcoin and the stock market means that traditional financial market dynamics will have a greater impact on <a href="/price" target="_blank" class="blog_inner_link">cryptocurrency prices</a>. Additionally, the decoupling of Bitcoin from gold indicates that investors prefer traditional safe-haven assets in risk-averse environments.

In summary, under the current macroeconomic conditions dominating market trends, the recent attack on Trump has not caused any major disruption. The market's focus remains on the upcoming Fed meeting this week. Regardless of the rate cut's magnitude, the market is likely to swing between optimistic bullishness and cautious de-risking, posing challenges for the price movements of Bitcoin and other cryptocurrencies.

The cryptocurrency market, particularly Bitcoin, stands at a crossroads. On one hand, it is driven by global liquidity expectations and rate cut anticipation. On the other hand, it faces potential impacts from traditional financial market dynamics. Investors should be wary of rapid changes in market sentiment and be flexible in adjusting their investment strategies to cope with potential market volatility.

###Summary: 
Bitcoin has declined for three consecutive days and is currently showing short-term stability on the 4-hour chart. Due to macroeconomic uncertainties, the key support level to watch is $55,000, while resistance remains at the psychological $60,000 level. 
Overall, bearish sentiment in the crypto market has not yet dissipated, with rapid rotation in speculative sectors. Bitcoin's market dominance remains high, and investors should closely monitor the Federal Reserve's decision this week for its potential impact on the market.

<div class="blog-details-info">
<div>Author:** Carl Y.**
<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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