With only the last two days left before the end of September, consider that the only change in the year is likely to be a rate hike on November 3. The last two days of intensive speeches by Fed officials have virtually guaranteed that the terminal interest rate in 2022 will be between 4.25% and 4.5%, compared to 75+50 and 50+50, which is why November is the biggest change, given that lower CPI is inevitable over the long run. It's only a matter of time. I've said before that the Fed's rate hike will not change the supply-side issue, so the most important thing to reduce US CPI is to reduce housing prices, rents, food, and energy, especially the housing issue that is the largest component of the core CPI. This can indeed be reduced by raising the lending rate and increasing taxes, which is why I've chosen to focus more on inflation in September and on the CPI reported in October.
In particular, the recent two days of oil prices have also made the September CPI trend a bit more psychedelic. Judging from the current signs, it is indeed very likely that the Biden administration will use low prices to release reserve oil to force oil traders in the United States to lower their prices. It is more likely that it will be for the mid-term elections. Once the December elections are over, it is very likely that oil prices will rebound. This is also a factor that may be unfavorable at the end of the year. And even if it is not for OPEC+ cuts, even the US itself and Mexico's junior partners are showing signs of reducing oil and gas production recently, which is starting to drive up US oil prices. As of today's data, both oil prices have risen by more than $5, which is extremely unfavorable for the crucial CPI reading in September. After all, there are limits to what the Fed can do after November, and even if things get any worse in December, another 75-basis-point increase at most will only mean raising the final interest rate in 2022 to 4.75%. The year that will follow is bound to be one of slower rate hikes in every sense, unless it is really a widening war over geopolitical conflict that will exacerbate inflation.
As the US interest rate hike draws to a close, the rise in the dollar index will definitely gradually peak. After all, this is followed by a frenzied interest rate hike cycle in various European countries. As a result, in October there was relatively no US interest rate hike, so that Europe's major currencies would have room to appreciate against the dollar under the European interest rate hike. Therefore, small partners with US dollar holdings could consider doing a short-term exchange rate difference trade before the eurozone's major interest rate hike.
With November's rate rise in the US leading the way, a 50 basis point increase in the dollar index would most likely be a ceiling, and with a 75 basis point increase, there is a good chance that the dollar index will have a chance to rise. And a rate hike can still be deduced from the CPI data. So it's OK to make a few pig's feet in exchange rate difference when it's branded. In particular, it is easier to trade in the stable dollar and the stable euro. Another thing that should be noted is that at the same time that US stocks opened for trading this evening, King Eagle Brad made another public speech. This time, the focus is on the US economy, letting King Eagle speak about the economy, rather than more worrying about the trend of US stocks after they open for trading tomorrow. However, with the end of September, third-quarter US stock results will be released in October. In particular, BTC and ETH-related technology stocks will have a short-term impact on prices. So the focus in the first half of October can be more on the financial results of the technology stocks in the head, especially the short-term operating partners who need more attention. Overall, though, the third quarter's results, with the exception of a few companies, are likely to be ugly, and a short-term downward trend for BTC and ETH will not be ruled out.
On current trends, the Nasdaq still isn't a good indicator that September's rate hike has been priced in, but the dollar index's retreat from its highs, even if it hasn't been priced in by now, will gradually ease back into next week, which is normal given that this time is not just a 125-basis-point spread around September's rate hike, but also a longer pessimistic period.
Under the influence of US monetary policy, it has pushed European countries to raise interest rates, and even the United Kingdom has forced itself to pay for Treasury bonds while raising interest rates. However, it is not known whether there is a direct link between this and the purchase of British Treasury bonds. After the purchase of British Treasury bonds, there has also been a trend of large-scale purchase of US Treasury bonds. In particular, there has been a relatively large reduction in the short-term and medium-term US debt-colonial interest rates. Previously, it had been said that 4% or more of risk-free arbitrage remains the best option.
As the dollar index continues to decline, it is good news for USDT and BUSD, the main buyers, and as of 8:00 a.m. today, although USDT, the main buyer, has barely made any gains, the market value of BUSD has climbed again by $160 million, and its market value has exceeded $21 billion. Although we do not know the main source of BUSD investors, it is still very good for the market recovery.
But USDC, which had been dragging its feet, did not lessen the mood for US investors by the fall in the dollar index, which was accompanied by a decline in market value of more than $200 million. And the market value of DAI, the ETH spot leverage measure, has recently been on a volatile trend, but it still has dropped $20 million in today's market, and a downward trend, indicating that ETH holders are not optimistic about the price trend for the time being.
And from the perspective of the overall market value of stablecoin, due to the reduction of USDC and DAI capital, especially the USDC sustained to maintain a state of substantial departure, leading to the initial growth of the overall market value of the stablecoin has once again appeared a downward trend, but now the better is the main trading forces of USDT and BUSD a market value is not reduced, a market value is in a significant increase, from the direction of purchasing power not only did not reduce but also have an upward trend.
In addition, the purchasing power of the real was also positive for BTC and ETH. The purchasing power performance up to 8:00 a.m. this morning showed that although the amount of capital transferred to the exchange from USDT dropped slightly, the drop was not that big. Therefore, we can see that the purchasing power of the three consecutive days was at a high level during the week. USDC has remained low.
But judging from the selling pressure that BTC and ETH have shifted to exchanges, the big movements in prices in the last two days have made short-term arbitrageurs more cautious, the holding time has narrowed significantly, so the overall selling pressure has been elevated, probably for fear that the holding time will be too long to turn a profit into a loss again, so even a small amount of profit will choose to leave the market only quickly and enter when the opportunity arises. After all, the market is still volatile.
Relative to selling pressure, the amount of withdrawals from the exchange also showed signs of expansion along with the increase in BTC and ETH prices. But because of the pressure of selling pressure is still relatively large, even if the withdrawals increased relative to yesterday still cannot cover all the selling pressure, there are still some chips stuck in the exchange. ETH withdrawals, while somewhat lower than the same period yesterday, were still much higher than the selling pressure.
More apparent in the exchange's inventory data is a rise in BTC stocks, but still a scramble for 2.4m units that has yet to fully break through. ETH of relatively high inventory can finally see the light of inventory reduction through the "desperate" withdrawal, although it is still higher than the inventory during LUNA, but the price after the merger does not have a significant reduction, but also remains strongly associated with BTC.
This is also why more investors who were originally bearish on ETH are willing to buy instead. In particular, judging from the data that ETH entered into the POS pledge, it has broken through 14 million chips to replace the miners to carry out the excavation after the merger. This is because the upgrade in Shanghai has not been carried out yet. It is not clear when the withdrawal will be made. It is likely that the number of pledges will increase even more sharply after the official release of more details.
Another issue that people are paying more attention to is the BTC selling pressure issue. There are always rumors of a crash when prices fall. Judging from the trend of BTC long-term holdings, the number of chips that have not been moved for more than 155 days is continuing to rise significantly. This means that when BTC was still at its high point from January to March, the number of chips that mainly were bought by the U.S. government saved rather than sold, and the number of BTCs in circulation continued to fall. This implies an almost total disregard for current prices in the early days, reducing the likelihood of a major sell-off, which is bound to leave less room for as long-term BTC ownership increases. While many small partners and even investors are now questioning whether the BTC can ever regain its halving cycle, in the context of the broader mood, be it the Fed's turn or the mid-term campaign tradition. Even if 2024 does not return to the highs of 2021, it will surely be much better than 2022 now and 2023 in the near future. Even in the event of a deep US recession, the Fed may not be pumping to revive the economy, and it has done so before, which is why there are so many currency holders waiting for a big cycle.
Emotionally, with the BTC and ETH prices rising, expectations that a bottom had already been reached, including the Nasdaq, began to rise, so both BTC and ETH continued to be bullish. Relatively speaking, the BTC itself has a better bullish atmosphere, and the long-term bearish ETH is gradually emerging. Of course, this is also short-term, and the bigger trend still depends on the current macro-mood changes.
In summary, the overall sentiment side has not yet shown the stable side, although the Na index has ended a continuous downward trend, but after the close has been a downward trend of volatility, so it is difficult to come to the bottom of the rebound has been a situation, and look at the BTC and ETH data can also be found, one is in an upward trend, the other is still high stock exchange can not be said to leave the risk area. But I am confident that, at best, next week, as September ends, sentiment will gradually ease back to where it was on October 13, when the September CPI data were released. The rest follows from the CPI and core CPI results
