Bitcoin once fell below $50,000. What do industry insiders think?

Crypto assets have been some of the victims of the unwinding of yen carry trades as speculators adjust to higher interest rates in Japan, while those investors are also dealing with a sharp rise in hedging costs due to fluctuations in the dollar-yen exchange rate.

We see a low probability of the Fed cutting rates five times by the end of 2024. Two rate cuts are more plausible, one in September and one in November, for a total of 75 basis points by the end of the year. This suggests a potential opportunity to add bonds in the coming months. Overall, we believe that emerging market bonds will perform well by the end of the year in an environment of gradually falling interest rates.Prior to the recent sell-off in early August, we were cautious about chasing the global equity rally, which was mainly driven by a surge in global technology stocks. Given the sharp rise in technology stocks earlier this year and investors seeking to sell assets to cover losses, the recent equity sell-off may still have room to continue.

Markets are clearly concerned about recent weak economic data. However, extrapolating last Friday's employment data seems to be an overreaction as this is only a monthly data. A 3-month rolling data would be a better guide. It is clear that recent US economic momentum has slowed. Recent improvements in US core inflation data, coupled with some comments from the Fed, have markets expecting a 25 basis point rate cut in September. The days of ultra-low US cash rates are over.
Despite market volatility and some concerns that recent weakness in economic data will continue, overall earnings and credit conditions remain good. Given that the Fed is expected to start cutting rates before the US election (November 5th) (implied futures), while a rate cut is warranted, on the surface, it may be problematic. This could exacerbate market volatility in the run-up to the election.

The decline in Bitcoin and Ethereum can be attributed to several factors. First, the employment data released last Friday was significantly lower than expected, with only 114,000 jobs added, which exacerbated concerns about a recession. The news over the weekend that Buffett's Berkshire Hathaway sold nearly half of its holdings in Apple in the second quarter may also put further pressure on the stock market.
In addition, over the weekend, Jump Crypto, the crypto division of Jump Trading, appeared to begin transferring hundreds of millions of dollars worth of crypto assets, including Ethereum and USDT. This led many to speculate that the company may be liquidating its crypto assets amid the US CFTC's investigation. Jump Trading has been transferring ETH to a CEX because there are rumors that they may be forced to exit the crypto business due to the CFTC's investigation.

I am reducing the risk of a portion of my portfolio. The main reasons include: 1. I am paranoid about the risk of collateral liquidation on BTC and ETH loans; 2. A large part of my net assets is in cryptocurrencies, leaving a small cash position, which needs to change; 3. For capital preservation.
I know it is best to buy on dips now, and the current oversold levels are likely to be the first real buying opportunity in the market, and I can take advantage of this opportunity if I have the funds on hand. Although many people have been catching flying knives in the past 72 hours. But remember that there are uncertainties in the Japanese market, the US market, and Iran, and these uncertainties may still bring more attractive opportunities. I still hold a large amount of cryptocurrencies. I have not completely exited the market.

Unlike in the past, this market is driven by sentiment rather than Bitcoin, of course, this is due to Ethereum spot ETF trading and large investors unwinding their ETHE (Grayscale ETH Fund) positions. From a larger time frame, the interest rate environment, the possibility of Trump's election victory, and the redemption selling pressure from Mt.Gox also put pressure on the cryptocurrency market.

A break below the $55,000 support line is expected, which could push prices down to $42,000. In this case, Ethereum could drop below $2,000. While this may appear extreme to some, the continued weak market structure, on-chain data, and our cycle analysis suggest that further pressure will come in the future.

I would not bet on ETH to fall further. It may fall further, but it is better to focus on finding future buying opportunities. Don't cry because it is over. I am neither bullish nor bearish on ETH. I think it is unclear where it will go next, and the risk/reward of betting on it may not be very good.
Whatever happens in the short term, Bitcoin below $50,000 is extremely cost-effective

I am as bullish (on the crypto sector) as I was six weeks ago. Focus on the technology, the sector, and adoption. Don’t focus on the price of digital commodities in the face of global macro volatility unless you are just trading.

As hard as it is to imagine, in the future we will look back on today as the place where Bitcoin’s “incredible bull run” began. With interest rates falling and fears of a recession looming, the vast amount of dollars invested in stocks and fixed income will seek to flow into other assets.