Global Macro Storm: CPI Data Sets the Tone for the Market, Bitcoin Dances with Wall Street

The global financial market is at a critical crossroads. Wall Street traders are betting on larger rate cuts from the Fed following weak employment data from the U.S., which has driven up U.S. stock futures. However, today's upcoming U.S. Consumer Price Index (CPI) report is a key variable in determining market direction. Meanwhile, strong economic data from Japan has also sparked speculation regarding interest rate hikes from the Central Bank of Japan (BoJ), which could trigger Close Position risks in yen arbitrage trading. In this macro storm, risk assets like Bitcoin are closely monitoring these signals, as their technical indicators and institutional demand suggest potential significant Fluctuation.

Macro Indicator: Fed Rate Cut Bets and Bank of Japan Policy

Investor optimism regarding the Fed's interest rate cut continues to rise. The weaker-than-expected employment report and the decline in the Producer Price Index (PPI) have pushed the market's expectations for a 25 basis point rate cut by the Fed in September to 100%. However, more notably, bets on a 50 basis point cut have also jumped from 7% to 8%. This optimism has driven U.S. stock futures higher: the Nasdaq 100 E-mini, S&P 500 E-mini, and Dow Jones E-mini have all increased.

However, the U.S. CPI report will be key in determining market sentiment. If inflation data is higher than expected, it may suppress bets on aggressive rate cuts and trigger concerns about stagflation, which would be bearish for the U.S. stock market. Conversely, if inflation cools down, it will boost market confidence and uplift risk assets.

At the same time, Japanese economic data has added uncertainty to the global market. In August, Japan's Producer Price Index (PPI) rose by 2.7% year-on-year, and the Business Sentiment Index (BSI) unexpectedly increased by 3.8%, both signaling upward inflationary pressures. This has strengthened market speculation that the Bank of Japan (BoJ) may raise interest rates in the fourth quarter. The resignation of Japanese Prime Minister Shigeru Ishiba, along with the rising popularity of Sanae Takaichi, who supports loose monetary policy, has cast a shadow over the direction of Japan's monetary policy.

The interest rate hike in Japan and the interest rate cut by the Fed will narrow the interest rate differential between the US and Japan, potentially triggering the Close Position of the "Yen Carry Trade." This closing action caused the Nasdaq Composite Index to plummet 11.2% in just a few days in 2024, and its potential impact cannot be underestimated. Nevertheless, the USD/JPY exchange rate remains stable around 147.458, indicating that the market is taking a cautious stance towards future uncertainties.

Bitcoin: Technical Momentum Building and Institutional Demand Returning

(Source: TradingView)

In this macro context, Bitcoin (BTC) is showing strong potential fluctuation signals. Currently, the price of Bitcoin hovers around 112,236 dollars, and technical indicators show that it is within an ascending symmetrical triangle pattern.

Key short-term points: Support level at 107,304 USD, resistance level at 117,156 USD. Once the resistance level is broken, the upward targets may point to 123,731 USD, 133,882 USD, and the long-term target could even reach 150,309 USD.

Long-term historical signals: Analysts point out that the Bollinger Bands on the Bitcoin monthly chart have contracted to the most extreme level since 2009. Historically, the contractions of the Bollinger Bands in 2012, 2016, and 2020 all indicated explosive price increases, suggesting that Bitcoin is brewing the largest price fluctuation in history.

Bullish Pattern: The "Cup-and-Handle" pattern on the Bitcoin monthly chart continues to be confirmed, with a maximum target price potentially reaching $305,000 between 2025 and 2026, which is more than 170% higher than the current price.

In addition to the technical aspects, institutional demand is also returning. Although retail investors had previously exited the market, market intelligence firm Santiment has found that institutional funds are flowing back into spot Bitcoin ETFs at an "astounding rate." Japanese listed company Metaplanet announced a capital raise of $1.4 billion, of which $1.25 billion will be used to purchase Bitcoin, further confirming strong institutional interest in this asset.

Conclusion: Await CPI signals, risk assets resonance

Today's US CPI report will be a key event defining the market direction for September. The results will directly impact the Fed's monetary policy expectations and global risk appetite, whether for the stock market or cryptocurrencies. With the intertwining possibilities of Fed rate cuts and Bank of Japan rate hikes, the changes in interest rate differentials between the US dollar and the Japanese yen add complexity to the market. This indicates that in the current environment, both traditional finance and crypto assets are inextricably linked to the global macroeconomic context, and all risk assets are waiting for the same signal to resonate and dance.