Matrixport Market Observation: The macro market has entered a low volatility period, and ETH may welcome a bottoming rebound

In the past week, BTC has been fluctuating narrowly around $100,000, with a maximum weekly volatility of 3.86%, and the current price is hovering around $95,000. After the market sentiment hit bottom, ETH saw a significant increase in attention due to community sentiment and the hulezhi event, with the price reaching a high of $2,849.70, marking an 11.88% increase for the week. Currently, ETH is fluctuating in the range of $2,600 - $2,700 (Binance spot real-time data as of 17:00 on the 18th).

The macro market has entered a low volatility cycle, coexisting with high growth, low inflation, and lower interest rates. Trump's administration has not brought the strong catalytic effect predicted by the market; after fluctuating, the dollar index has retreated, and the ever-changing tariff policies have led the market to gradually enter an immune state. In contrast, the market is looking forward to the quick end of the Russia-Ukraine conflict through a meeting between Trump and Putin.

Market Analysis

Expectations for a Fed rate cut in June rise to 60%, inflation remains a current focus

In the past week, the release of core economic data has raised market expectations for a rate cut in June. Against the backdrop of CPI data exceeding expectations and weak retail sales data, the expectations for a rate cut have risen to 60%. Inflation remains an important focus for the current market, and the Fed is committed to alleviating market concerns about inflation.

Powell stated, "The CPI data is almost above all predictions, but I want to remind everyone of two points: first, we will not be overly optimistic because of one or two good data points, nor will we be overly pessimistic because of one or two bad data points. Second, our inflation target focuses on the Personal Consumption Expenditures (PCE) price index because we believe it better reflects the inflation situation."

Trump's erratic tariff policies further boost gold prices, strong demand for gold delivery

Gold's primary status as a safe haven remains solid, and it has become the primary tool for hedging against inflation. Over the past 25 years, gold prices have risen by 10%, and the demand for spot gold delivery is strong. According to Bloomberg, the amount of gold transferred to U.S. COMEX-approved warehouses by financial institutions has increased by over 70%.

Trump's erratic tariff policies, combined with the Fed's stance on inflation, have further driven market demand for gold. In this regard, Tradu's senior financial commentator Nikos Zabourlas stated, "In the uncertain 'Trump 2.0' era, gold will naturally benefit from risk aversion and central bank purchases. However, if inflation rebounds, the Fed will adopt more cautious monetary policy easing measures, which could push up the dollar and suppress gold demand."

ETH market trading sentiment has turned pessimistic, may welcome a dead cat bounce

Over the past 25 years, ETH prices have fallen by more than 20%, and the actual volatility has also performed poorly among crypto assets and major stock indices, with market trading sentiment for ETH recently hitting rock bottom. Based on ETH's strong application scenarios and Trump's World Liberty Financial continuing to buy ETH, there is a possibility of a dead cat bounce for ETH.

Since the beginning of this week, ETH has also seen a relatively strong rebound, with a maximum increase of over 11%. As the community regains interest in ETH and the conversion from SOL to ETH occurs, the drawbacks of meme coins are becoming apparent in a market with liquidity shortages, and the ETH ecosystem, which has strong usage attributes, may experience a rebound.

Market Highlights

Australian central bank cuts interest rates for the first time in 4 years, hawkish remarks lead to significant stock market decline

The Reserve Bank of Australia lowered the benchmark interest rate by 25 basis points to 4.10%, marking the first rate cut since November 2020 and a new low since October 2023, in line with market expectations. The RBA stated that there are signs that inflation may fall faster than expected. It believes that if interest rates are cut too quickly, there is a risk of inflation stagnating.

The Reserve Bank of Australia stated, "Although today's policy decision acknowledges the encouraging progress on inflation, the committee remains cautious about the prospects for further policy easing and will continue to rely on data and dynamic assessments of risks to guide its decisions." After the announcement, the Australian dollar briefly rose before giving back its gains. Influenced by hawkish remarks, the Australian stock market declined.

BTC market adoption increases, 12 U.S. states' pension funds or treasuries hold $330 million worth of Strategy stock

Cointelegraph reported that by the end of 2024, 12 states in North America have reported that their state pension funds or treasuries hold shares of Strategy (formerly MicroStrategy) stock MSTR, totaling $330 million.

California, Florida, Wisconsin, and North Carolina have the largest exposure to MSTR among their retirement funds and treasuries, with the California Teachers' Retirement Fund holding 285,785 shares of MSTR, valued at approximately $83 million, ranking first. Other states holding MSTR in their public funds include Arizona, Colorado, Illinois, Louisiana, Maryland, Texas, and Utah.