[Comparative to Daily Market News] Non-agricultural data is making waves again, and derivatives data suggests “more room for downside”

Financial markets closed bleak in the first week of September.

According to the non-farm payrolls report released on Friday, the US added 142,000 jobs in August, lower than economists' expectations of 160,000, but still higher than 89,000 after the July revision. The unemployment rate fell to 4.2%, in line with expectations, down from 4.3% in July.

This Report Makes Traders Begin to ReevaluateFederal ReserveThe extent of interest rate cuts. According to the Chicago Mercantile Exchange's FedWatch tool, traders believe that at the Federal Open Market Committee meeting held on September 18, the probability of cutting interest rates by 25 basis points was over 70%, and the possibility of a larger rate cut (50 basis points) was close to 30%.

Federal Reserve Governor Waller said in a speech on the same day that if data is needed, he supports continuous interest rate cuts, and if necessary, supports more drastic interest rate cuts.

Some observers believe that cutting interest rates by a smaller margin would be more beneficial to risky assets, as cutting interest rates by 50 basis points may indicate that the Federal Reserve is increasingly worried about the US economy falling into recession.

At the close of the day, S&P indicatedThe Dow Jones Index, and the Nasdaq Index all declined, down 1.73%, 1.01%, and 2.55%, respectively. NASDAQCreateWorst week since June 2022, the S&P Index recorded the worst week since March 2023.

Comparative data shows that after the employment data was released,BitcoinIt once soared to $57,000, then bearish forces pushed the price below $53,000, and once retraced to the lowest price since the yen arbitrage trade closed in early August.At press time, Bitcoin had recovered slightly to around $53,800, down 4.8% in 24 hours.

Altcoins have been hit hard, and only the top 200 tokens by market capitalizationSui(SUI) achieved an increase. Among the currencies that fell,ConstitutionDAO(PEOPLE) led the decline, down 11.8%, Echelon Prime (PRIME) down 9.5%, and Popcat down 9%.

Currently, the overall market value of cryptocurrencies is 1.87 trillion US dollars, and Bitcoin's market share is 56%.

Derivatives data suggests “more downside”

New data from the cryptocurrency derivatives market suggests that traders' bearish sentiment is increasing, and options activity indicates that prices of mainstream coins such as Bitcoin and Ethereum are expected to fall further.

crypto exchangeBybitA new report published in collaboration with analytics and research platform Block Scholes highlights that the level of implied volatility of Bitcoin and Ethereum options has risen significantly at different expiration dates. This surge is particularly evident in short-term options, indicating a recent increase in uncertainty.

Nathan Thompson, Bybit's chief technical analyst, explained: “Implied slope, the difference in implied volatility between an off-price put option and a call option, can reveal the current market sentiment for BTC and ETH options. An increase in the implied volatility of a call option is a bullish indicator. The higher the implied volatility of a call option, the worse it is.”

He added:“All the signs that the options market is showing right nowIt all shows that there is more room for downside”.

Thompson said that according to the overall trend observed in derivatives data, inexperienced traders are best left on hold until the market figures out the next trend.

The Secure Digital Markets analyst stated:”The strong correlation between BTC and the stock market remains, and given current price trends and short-term economic prospects, many funds and traders may consider reducing risk.It is likely that the low $50,000 range will be retested.” 

Keep an eye on ETF flows

Spot BTC exchange-traded funds (ETFs) saw their worst outflow since May.

According to Lookonchain data, the US spot Bitcoin ETF had its biggest outflow since May 1, with a total net outflow of US$287.8 million on Tuesday. The largest Bitcoin ETF by asset sizeBlackRockIts IBIT group saw no significant capital inflows, while Grayscale is the second-largest Bitcoin ETFGBTCThere was an outflow of funds of $50.39 million.

Fidelity's FBTC recorded the largest outflow of funds, amounting to $162.26 million. Other well-known funds include Ark and21SharesARKB, with outflows of $33.6 million,BitwiseThe BITB outflow was $24.96 million. Furthermore,VanEck、Valkyrie、InvescoETFs managed by Franklin Templeton also experienced small-scale outflows.

OTC Capital CEO Brian Dixon commented that due to various factors, the cryptocurrency market will continue to fluctuate, and market observers will keep a close eye on ETF flows.

He stated:“The market is expected to remain volatile, and people will focus on the performance of new ETFs and how traditional investors adapt to the cryptocurrency market. The US presidential election may affect market sentiment, especially if pro-cryptocurrency policies are promised or implemented. I think the convenience of ETFs has fueled institutional capital inflows into cryptocurrencies (Bitcoin in particular), and this trend is likely to continue.”

Dixon concluded: “The 2024 crypto market is at a critical moment, characterized by increased legitimacy through regulatory approvals such as ETF approvals, technological advancements, and increased institutional interest. While the immediate consequences of Bitcoin's halving and ETF launch set a bullish tone for the market, investors are advised to stay alert due to inherent volatility and regulatory uncertainty. “In my opinion, the trajectory of the market looks promising, with significant potential for growth, but considering the many impacts, it is essential to proceed with caution.”

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