Last week (from July 29 to August 4), the market experienced fluctuations due to macroeconomic and geopolitical factors, causing a brief decline in BTC and ETH prices. Influenced by the Federal Reserve's hawkish statements, BTC prices fell from July 29 to August 2, briefly dropping below $112,000, reaching a low of $111,920, before rebounding above $115,000, with a maximum volatility of 6.1% during the week. BTC's current price stabilizes around $114,307. Last week, ETH experienced increased volatility driven by capital, hitting a low of $3,354.28 and a high of $3,886.44, with a maximum volatility of 13.6% during the week, and its current price stabilizes around $3,649 (data sourced from Binance spot market, August 5, 14:47).
Affected by macroeconomic fluctuations, U.S. stock indices initially fell and then rose last week. By the close of trading last Friday (August 1), the Dow Jones fell by 1.23%, the S&P 500 dropped by 1.6%, and the Nasdaq declined by 2.24%. By the close on August 4, U.S. stocks rebounded significantly, with the Dow rising by 1.34%, the S&P 500 up by 1.47%, and the Nasdaq increasing by 1.95%.
Market Interpretation
Non-farm payroll data falling short of expectations triggers global volatility, with over $700 million in liquidations in the crypto market
On August 1, the U.S. non-farm payrolls for July increased by only 73,000, far below market expectations, marking a near ten-month low, with the previous value also significantly revised down. The disappointing employment data sparked strong dissatisfaction from Trump, who directly fired the head of the Bureau of Labor Statistics and accused the data of being manipulated. On a macro level, weak employment data, intense political reactions, and escalating geopolitical tensions collectively drove significant fluctuations in the U.S. stock and crypto markets.
BTC dipped to $112,751 early that day, erasing three weeks of gains, while ETH also fell to a low of $3,431. The total liquidation amount across the network reached $726 million within 24 hours, with long positions accounting for 88%. ETH liquidations totaled $270 million, surpassing BTC's $165 million. Crypto-related U.S. stock sectors generally saw significant declines, with Coinbase dropping over 16%.
Market sentiment was significantly pressured, with risk appetite cooling and safe-haven funds flowing into assets like gold. However, institutions like ARK Invest took advantage of the pullback to increase their holdings in crypto-related stocks, and some whales showed signs of buying at lower levels.
ETH price correction diverges from whale large purchases, long-term confidence remains intact
Last week, ETH prices experienced a 10% correction, dipping below $3,400 for the first weekly decline in six weeks, reflecting an increase in profit-taking and deleveraging behavior in the short term. Meanwhile, on-chain data indicated that a certain whale accumulated approximately $300 million in ETH during the price drop, becoming a focal point of market attention.
Despite the short-term market sentiment being under pressure, institutional-level funds "buying the dip" indicate that the main players remain optimistic about ETH's medium to long-term trajectory. Overall, ETH currently exhibits a divergence structure of "price adjustment - main force accumulation," with short-term volatility primarily influenced by macro pressures and a strengthening dollar, while long-term capital inflows are expected to provide support for future markets.
Federal Reserve's hawkish statements exert pressure, short-term risk assets under strain
At the beginning of August, the Federal Reserve maintained the federal funds rate in the range of 4.25%-4.50% as expected, with two members advocating for a 25 basis point rate cut. Subsequently, Chairman Powell emphasized in a press conference that tariff increases are driving up prices, short-term inflation expectations have risen, and warned the market that "if the Federal Reserve does not raise interest rates, it is equivalent to ignoring inflation risks." As a result of these hawkish statements, BTC prices quickly fell nearly 2% to $115,800, with major U.S. stock indices turning from gains to losses, and the altcoin sector performing even weaker, with ETH, SOL, and XRP all dropping nearly 4%. Overall, Powell's signals of tightening policy put short-term risk assets under pressure.
Market Highlights
White House plans to issue executive order to regulate banks' discriminatory services towards the crypto industry
On August 5, the White House is planning to increase regulation of large banks through an executive order, focusing on investigating and punishing behaviors that refuse to provide services to specific client groups, such as cryptocurrency companies, for political reasons. This policy direction reflects the U.S. government's strengthening of regulatory attitudes towards fair competition and inclusive financial services among financial institutions.
U.S. SEC approves physical delivery, pushing crypto ETFs closer to commodity standards
On July 29, the U.S. Securities and Exchange Commission (SEC) officially approved authorized participants (AP) to create and redeem BTC, ETH, and other cryptocurrency ETFs in physical form. Unlike the previous limitation to cash purchases and redemptions, this move aligns crypto ETFs with regulatory standards of traditional commodity ETFs like gold and crude oil, making physical delivery the new norm.
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