Matrixport Market Observation: Capital Flow Divergence Under Macroeconomic Disturbances, What Will Happen to BTC and ETH Trends?

Last week (from July 29 to August 4), the market experienced fluctuations due to macroeconomic and geopolitical factors, causing a brief downturn in BTC and ETH prices. Following hawkish comments from the Federal Reserve, BTC prices fell from July 29 to August 2, briefly dropping below $112,000, reaching a low of $111,920, before rebounding above $115,000, with a maximum volatility of 6.1% during the week. BTC's current price is stable around $114,307. Last week, ETH experienced increased volatility driven by capital, hitting a low of $3,354.28 and a high of $3,886.44, with a maximum volatility of 13.6% during the week, and its current price is stable around $3,649 (data sourced from Binance spot market, August 5, 14:47).

Affected by macroeconomic fluctuations, U.S. stocks initially fell and then rose last week. By the close on Friday (August 1), the Dow Jones fell 1.23%, the S&P 500 dropped 1.6%, and the Nasdaq declined 2.24%. By the close on August 4, U.S. stocks rebounded significantly, with the Dow rising 1.34%, the S&P 500 up 1.47%, and the Nasdaq increasing 1.95%.

Market Interpretation

Non-farm data falling short of expectations triggers global volatility, with over $700 million in liquidations in the crypto market

On August 1, U.S. non-farm payrolls for July increased by only 73,000, far below market expectations, marking a near ten-month low, with the previous value also significantly revised down. The "disappointing" employment data sparked strong dissatisfaction from Trump, who directly fired the head of the Bureau of Labor Statistics and accused the data of being manipulated. On a macro level, weak employment data, intense political reactions, and escalating geopolitical tensions collectively drove significant fluctuations in both the U.S. stock and crypto markets.

BTC dipped to $112,751 early that day, erasing three weeks of gains, while ETH also fell to a low of $3,431. The total liquidation amount across the network reached $726 million within 24 hours, with long positions accounting for 88%. ETH liquidations totaled $270 million, surpassing BTC's $165 million. Crypto-related U.S. stock sectors generally saw sharp declines, with Coinbase dropping over 16%.

Market sentiment was significantly pressured, with risk appetite cooling and safe-haven funds flowing into assets like gold. However, institutions like ARK Invest took advantage of the pullback to increase their holdings in crypto-related stocks, and some whales showed signs of buying at lower levels.

ETH price correction diverges from whale large purchases, long-term confidence remains intact

Last week, ETH experienced a 10% correction, dipping below $3,400 for the first time in six weeks, reflecting an increase in profit-taking and deleveraging behavior in the short term. Meanwhile, on-chain data showed that a particular whale accumulated approximately $300 million in ETH during the price decline, drawing market attention.

Despite the short-term pressure on market sentiment, institutional-level capital "buying the dip" indicates that major players remain optimistic about ETH's medium to long-term outlook. Overall, ETH currently exhibits a divergence structure of "price adjustment - major accumulation," with short-term volatility primarily influenced by macro pressures and a strong dollar, while long-term capital inflows are expected to provide support for future market performance.

Hawkish comments from the Federal Reserve exert pressure, short-term risk assets under strain

At the beginning of August, the Federal Reserve maintained the federal funds rate in the range of 4.25%-4.50% as expected, with two members advocating for a 25 basis point rate cut. Subsequently, Chairman Powell emphasized in a press conference that tariff increases are driving up prices, short-term inflation expectations have risen, and warned the market that "if the Federal Reserve does not raise interest rates, it is equivalent to ignoring inflation risks." As a result of these hawkish comments, BTC prices quickly fell nearly 2% to $115,800, while major U.S. stock indices turned from gains to losses, with altcoins performing even weaker, as ETH, SOL, and XRP all dropped nearly 4%. Overall, Powell signaled a tightening of policy, putting short-term risk assets under pressure.

Market Highlights

White House plans to issue executive order to regulate banks' discriminatory services to the crypto industry

On August 5, the White House is planning to implement an executive order to increase regulation of large banks, focusing on investigating and penalizing actions that refuse to provide services to specific client groups, such as cryptocurrency companies, for political reasons. This policy direction reflects the U.S. government's strengthening stance on fair competition and inclusive financial services for financial institutions.

U.S. SEC approves physical delivery, pushing crypto ETFs closer to commodity standards

On July 29, the U.S. Securities and Exchange Commission (SEC) officially approved authorized participants (AP) to create and redeem BTC, ETH, and other cryptocurrency ETFs in physical form. Unlike the previous limitation to cash purchases and redemptions, this move aligns crypto ETFs with traditional commodity ETFs like gold and crude oil, making physical delivery the new norm.

Disclaimer: The above content does not constitute investment advice, sales offers, or purchase offers to residents of the Hong Kong Special Administrative Region, the United States, Singapore, or other countries or regions where such offers or invitations may be prohibited by law. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.