Crypto market weekly review (09.01~09.07): US employment data supports a rate cut restart in September, SEC new regulations cool down treasury companies.

Author: 0xBrooker

BTC daily chart trend

BTC opened this week at $108,247.95, closed at $113,478.00, with a low of $111,129.61 and a high of $113,390.00. It had a decline of 3.41% and an increase of 2.66%, with trading volume shrinking compared to last week.

From a medium-term perspective, BTC is still in a market turmoil of "interest rate cuts and revisions" and "the game of Federal Reserve independence." From a short-term perspective, the BTC price has fluctuated in the past week based on employment data and changes in industrial policies.

The overall employment data aligns with the expectation of a "mild cooling," which pushes the probability of a rate cut in September to around 90%. The expectation of three rate cuts within the year has rebounded somewhat, but it remains very low.

The SEC stated that it will strengthen supervision over treasury companies issuing stock to acquire cryptocurrencies, which has suppressed the financing activities of treasury companies, currently the largest source of buying power in the market, and is also one of the reasons for the market's downturn.

EMC Labs maintains a cautiously optimistic attitude in the medium term. The rebalancing of various market forces around the interest rate cut is bound to be bumpy, but the overall U.S. economy is sound. The restart of the interest rate cut cycle supporting the upward pricing of risk assets is still a certainty.

Policy, Macroeconomic Finance and Economic Data

On September 4th, the JOLTS job openings data was released first, showing a value of 8.4 million, which is lower than the expected 8.7 million and the previous value of 8.9 million, continuing to slide to a three-year low, further confirming that labor demand is cooling.

On September 5th, the initial jobless claims number released last week was 232,000, slightly higher than the market expectation of 230,000. The continuing jobless claims number was 1,751,000, also slightly above the market expectation of 1,740,000. Both figures indicate that the job market is slowing down.

On September 6, the non-farm payroll data was released, showing that 173,000 jobs were added in August, lower than the market expectation of 180,000 and the previous value of 190,000. The unemployment rate rose from 4.0% to 4.1%, reaching its highest point since 2021, indicating a significant cooling of the labor market.

Employment data shows a moderate "cooling", indicating that the economy and employment are facing a slowdown, which solidifies the market's expectation of a rate cut in September. FedWatch shows that the probability of a rate cut in September is nearly 90%, while there is also a small probability of a 75 basis point cut. This is a slight adjustment from last week's expectations.

Following this adjustment, the US stock market rebounded this week after two consecutive weeks of decline, with the Nasdaq rising by 1.14% and the S&P 500 increasing by 0.33%. All three major indices reached historical highs during the trading session. The yields on both short-term and long-term US Treasury bonds continued to decline, falling by 2.3% and 2.03%, respectively.

No worries about interest rate cuts, the extent and frequency of rate cuts are still being priced in. The US dollar index fluctuated, but fell 0.11% to 97.737 for the week. Gold surged by 3.52% to 3639 dollars per ounce.

Cryptocurrency market

After a significant downward revision last week, BTC has achieved a rebound of 2.66% this week, barely breaking through the "Trump Bottom" (the $90,000~$110,000 range), still under pressure from the "first bullish uptrend line" and remains below the 20-day moving average.

In the past two months, BTC aimed to open the "fourth wave of increase" but ultimately failed and returned to the adjustment range. Besides the impact of the interest rate cut cycle, it is also related to the shift of funds and the "cooling" of policies.

According to eMerge Engine data, the BTC Spot ETF channel funds have weakened for several consecutive weeks, and the procurement scale of the treasury company has also significantly declined.

In terms of regulation, the SEC released its latest opinion on Digital Asset Treasury (DATs) this week, incorporating them into the national exchange/ATS regulatory agenda, and requiring treasury companies to obtain shareholder approval before diluting shares to finance the purchase of crypto assets. This new regulation will undoubtedly slow down the acquisition speed and scale of treasury companies, which the market views as a significant bearish signal, leading to a widespread decline in the stock prices of treasury companies, and negatively impacting the trading prices of BTC, ETH, and others.

In addition to the cooling of industrial policies and the slowdown of capital inflows, long-term selling is also an important reason for the weakening of BTC prices. According to on-chain data, this week long-term holders reduced their BTC holdings by over 40,000 coins, which is significantly higher than last week.

The current coin price is close to the short holding price, indicating that the downside risk has significantly decreased.

Cycle Indicator

According to eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.375, in an upward relay phase.