Fed rate cut expectations rise, crypto assets market welcomes new trends

The Personal Consumption Expenditures Index (PCE) for June shows that inflationary pressures have eased, positively impacting the market. Investors' expectations for the Fed to cut interest rates this year have further increased. Data platforms indicate a 90% probability that the interest rate will remain unchanged at the meeting on July 31, while there is an 88% chance of a rate cut at the September meeting.

The Bitcoin spot ETF performed moderately last week, with a net inflow of over $400 million on the first day, followed by lower liquidity in the subsequent days. Market attention may shift to the listing and trading of the Ethereum spot ETF.

The Ethereum spot ETF officially started trading in the United States on July 23. It recorded net inflows on the first day, but subsequently experienced net outflows for three consecutive days, with an average daily outflow of over $100 million. A certain conversion trust fund has seen net outflows every day, while other issuers have shown net inflows. The ETH price dropped from the peak of $3,541 on the 23rd, touching as low as $3,090 at one point. Currently, the ETH price trend is similar to that of Bitcoin's spot ETF listing, showing a downward trend.

Recently, several American politicians have expressed their views on Crypto Assets. A certain vice president's advisory team consulted industry leaders on the issue of Crypto Assets, implying that they might support the development of the encryption field more than the current president.

The mayor of the second largest city in a certain state stated that the city's retirement fund is updating its documents to the regulatory authorities, planning to allocate a specific percentage of the fund to Bitcoin ETFs, following the practice of another state's retirement fund.

A presidential candidate made three commitments at the Bitcoin conference: on the first day of taking office, the chairman of the Securities and Exchange Commission will be replaced, the government will not sell its held Bitcoin and will hold it as a strategic reserve asset, and the establishment of a Bitcoin and Crypto Assets Presidential Advisory Council to formulate transparent regulatory regulations.

Another long-time supporter of Crypto Assets in the Senate has stated that they are pushing for a new legislative proposal suggesting that the U.S. Treasury purchase 1 million coins of Bitcoin within 5 years to offset the impact of dollar depreciation.

An independent candidate claims that if elected president, he will sign an executive order requiring the daily purchase of 550 coins of Bitcoin, establish a strategic reserve of 4 million coins of Bitcoin, and instruct the tax authorities to issue guidelines stipulating that transactions between Bitcoin and the US dollar are tax-exempt.

From a technical perspective, the Bitcoin daily chart shows that the trend line from early June to the end of July continues to act as resistance. On July 27, influenced by the speech expectations of a presidential candidate, Bitcoin briefly touched $69,000 during the day and closed at $67,900. The short-term support range is between $63,800 and $65,400.

Historical data shows that July is usually a month of positive returns. The opening price this month was $62,800, and it is currently recording about a 7% return. However, August and September often present negative returns, and investors should be wary of potential market corrections.

With the launch of Ethereum spot ETFs and statements from political figures regarding encryption, crypto assets have officially entered the mainstream of the US financial sector. The presidential election and expectations for Fed interest rate cuts will be key factors affecting Bitcoin prices in the second half of the year. In addition to paying attention to the dynamics of the encryption market, investors should also keep an eye on changes in the US macro economy, politics, and regulatory environment.