Orange Talks about Hot Topics

First, let's talk about the macro situation. The biggest news yesterday was the downgrade of the United States by one of the three major rating agencies, Fitch Ratings. With this downgrade, only Moody's maintains an AAA rating for the United States, while the other two have been downgraded to AA+. Many may not understand the impact of such a downgrade. It's like a teacher giving a student a grade of excellent, good, or fair, which doesn't have much impact on the student itself, but it can lead to imbalanced parental attitudes and comparisons among classmates. Therefore, Fitch's downgrade was directly opposed by U.S. Treasury Secretary Yellen. There were even reports that the Biden administration had attempted to organize the downgrade by Fitch.

In terms of impact, Fitch's downgrade indicates a lack of confidence in the future of the United States. Fitch stated that it expects the U.S. fiscal situation to deteriorate over the next three years, with overall government debt burdens remaining high and continuing to grow. This is a fatal blow to the financial markets. Previously, Fitch had downgraded the rating of the S&P 500, resulting in a 16% drop in stock prices within 10 days and a 48% increase in the VIX volatility index, which was a major reason for the general decline in the stock market last night.

There were also two important macroeconomic data releases last night. First, the U.S. JOLTS job openings and voluntary quit rates both hit a two-year low, and the scale of layoffs was the lowest since the end of last year. This data is something the Federal Reserve is hoping to see, as previously, job openings had repeatedly hit record highs, which had been a headache for the Fed. This data indicates a slowdown in labor demand, which is favorable for reducing inflation.

The second piece of data is that the U.S. ISM manufacturing index has contracted for nine consecutive months, with the employment index hitting a three-year low and weak overseas demand. This data can also be considered positive. Just remember that any decline in employment, demand, or consumption is good news.

Now for some not-so-good news: room-temperature superconductivity has become a new speculative concept in the global financial markets. This was first sparked by South Korea, where a team of physicists first discovered the room-temperature superconductor LK99. Then China and the United States began replicating the experiment based on the paper. As a result, Huazhong University of Science and Technology claimed to have successfully replicated it, and Lawrence Berkeley National Laboratory in the United States also published a paper stating that it theoretically exhibits characteristics of high-transition-temperature superconductivity.

Subsequently, the U.S. company Teji Quantum released a photo of a black sample that appeared to be suspended at an angle on a magnet, along with the caption "See you on Monday," which completely sparked a frenzy in superconductivity-related stocks. Although room-temperature superconductivity is still far from being realized, it is foreseeable that once this technology matures, it will definitely be disruptive. Its attractiveness to capital may be even stronger than that of AI. AI has already had a serious impact on cryptocurrencies this year, and room-temperature superconductivity, which has nothing to do with blockchain, may bring about a new wave of bloodsucking in the short term.

Orange Talks about the Market

BTC: Bitcoin has been testing support around 28700 in recent days. Last night, it received effective and definitive support near 28550. From the daily chart perspective, this is the first effective support since the drop on July 24. If the daily level does not break through the position near 29300, it will continue to consolidate upwards.

On the 4-hour chart, the market was pulled back into the oscillation range by the positive news from MicroStrategy, and there is currently no clear direction. The market will continue to oscillate like this. In short, the current market has no clear direction, no impetus for a major decline, and no momentum for a major rise.

Perpetual short-term recommendation: Long 29300-29000, Short 29900-30200.

ETH: Due to the impact of the CRV incident, the TVL on the ETH chain has dropped sharply to only $22.6 billion. Last week, this number was over $25 billion. This is why it is said that the short-term CRV incident is the biggest bearish factor for ETH. Moreover, this time it was not the CRV smart contract that had an issue, but the EVM compiler. The reason Vyper was attacked is that Vyper has less code compared to Solidity. If there is enough motivation in the future, Solidity is also very dangerous. However, despite the decline in TVL, the staking rate on the beacon chain is still rising. There were only 30,000 new stakes and less than 9,000 withdrawals yesterday, indicating that people's enthusiasm for staking remains high. Therefore, there are more people who are bullish on ETH in the long term, but in the short term, ETH is indeed relatively weak.

Perpetual short-term recommendation: Long 1835-1825, Short 1880-1900.

Risk Warning and Disclaimer: The market is risky, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account the specific investment objectives, financial situation, or needs of individual readers. Readers should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this article is at your own risk.

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