【MICA RESEARCH】If U.S. stocks end the rebound, the cryptocurrency market may be hit

The performance of the cryptocurrency market was not satisfactory last week. The Nasdaq index in the United States rebounded by 8% within a week, but the price of Bitcoin was still fluctuating in the price range of $30,000. There was no buying like the US stock market. We thought that cryptocurrencies were expected to rebound along with US stocks.

However, the external buying in the market is very weak. The main reason is not that the cryptocurrency market has no speculative value. The reason why Wall Street funds are reluctant to come back to buy cryptocurrency is that the Luna incident is making the internal control of the fund more stringent, and I am afraid that I will step on Luna again. The black swan event where the stop loss could not be stopped and returned to zero directly. From the large decrease in the trading volume of Coinbase, it can be seen that many of their institutional clients are Wall Street hedge funds.

Tighter internal control has made it not as easy for hedge fund managers to invest in cryptocurrencies. It is better to follow others to return to the US stock market to grab a rebound. This year, global risk assets will fluctuate with the US Fed’s interest rate policy. In the next two weeks, there are two related The event is about to happen, including the May price index announced on June 10, and the FOMC meeting to be held on June 16 to decide the rate of interest rate increase, which will affect investors’ capital operations in the U.S. stock market and cryptocurrency market.

But now the price index is not as important as it used to be, because the US Fed talks have revealed that both June and July will raise interest rates two yards each, and the current CME interest rate futures trading also shows that nearly 90% of the positions are betting on this result. After July, the federal funds Interest rates will rise to 1.75% to 2.00%. This script is unlikely to change. The US Fed will observe the subsequent price index after the rate hike in July. If inflation improves, it may suspend interest rate hikes in September. The inflation has not improved to a safe range, and the Fed will continue to raise interest rates.

That is to say, the market expectations are now almost revised. We believe that most investors want to make a profit in the stock market before raising interest rates, and successively grab the short-term operation of US stocks. After the real interest rate hike, plus the Fed began to shrink its balance sheet, Bond prices will be revised down again, driving yield rates to rise. At this time, the market will really feel a sense of interest rate hikes. At that time, investors will be more conservative in the operation of funds. It is expected that the US stock market party will continue until the price index is announced, and the rebound is expected to continue. .

If the time line is lengthened, the long-term bearishness of the stock market still has no real response, and Wall Street institutions rarely unanimously say that this is just a dead cat rebound in the bear market, and it will continue to fall in the future. In addition, some research institutions have pointed out that institutional investors are indeed reducing their size. In the market, the rebound is now bought by retail investors, but the currency circle does not even have an obvious rebound now, and the market outlook is inevitably worrying.

A. On May 31, investors bought the bottom, and Bitcoin slowly rose to $31,000

Unlike the rebound trend of US stocks and Asian stocks, Bitcoin is decoupling and rebounding. It has been stuck in the $30,000 range for a long time. Now investors are trying to make a breakthrough. Bitcoin rose from $30,000 to $31,500 yesterday, an increase of about 5 %, further driving up the trend of other cryptocurrencies in the market. Among them, ADA rose by 16%. This trend is intriguing. The cryptocurrency market seems to usher in a rebound soon, but we think that the rally is more like measuring the wind direction. Whether subsequent investors are willing to chase the price.

Now that the global asset market is rebounding after the collapse, it is expected that the party will continue until the US price index is announced in May. Next, there will be the FOMC meeting of the US Fed on June 15. It is expected to raise interest rates by two yards (0.5%). The federal benchmark interest rate will reach 1.25% to 1.50%. Now the crypto market has expressed its desire to participate in the rebound to see if other retail investors are willing to chase the price. Rather than being optimistic about the long-term confidence, we believe that this rebound is used to spy on market sentiment.

Next, the crypto market depends on whether the U.S. stock market can continue to rebound. Although the current trend is decoupling, it will affect investment sentiment. If the U.S. stock market is a dead cat rebound this time, the situation is probably not good. Now Wall Street institutional investors are saying that this wave of rebound is The typical rebound band of the bear market will still go down after the rise, but Wall Street often says another set and does another set, and we expect the rebound to continue for a while.

B. On June 1, South Korea will establish a new digital asset supervision committee to prevent similar LUNA incidents from happening again

The South Korean government is planning to set up a new digital asset supervision committee in early July. The purpose is to supervise the cryptocurrency industry in South Korea and the formulation of related laws. In the future, it will act as a formal government unit to supervise the encryption industry. This unit will not only supervise the listing situation. , also includes details such as disclosure of encrypted token information, transaction specifications, etc., and may directly manage the cryptocurrency exchange as a stock exchange to achieve maximum protection for “investors”.

In the future, this unit will cause a lot of trouble to South Korean crypto exchanges. Although the intention to protect investors is good, the rules for listing, trading, deposit and withdrawal of South Korean crypto exchanges will be stricter in the future, which will definitely be negative for user experience. In the future, we speculate that the launch of new tokens by Korean exchanges will also slow down, because a series of government reviews may be required to ensure that the Luna crash will not harm Korean investors again.

This is also the reason why Luna 2.0 is not listed on Korean exchanges now, and all overseas exchanges are now speculating on Luna 2.0 tokens. Users who use local exchanges cannot participate in the new round of you throw me pick up activities, although investors can still get airdrops , but it must be transferred to an overseas exchange to trade, which will form a great restriction on the growth of the Korean crypto industry.

C. On June 2, the Solana blockchain network was down again for more than 6 hours, and SOL collapsed by 12%

Solana, which has been shut down many times this year, had another problem yesterday. A bug in the transaction function caused the nodes of the entire network to fail to reach a consensus, and the transaction could not be completed. The nodes restarted at the same time. In the short term, Solana engineers planned to suspend the problematic transaction function and let the network continue to operate first. However, this disaster caused Solana to plummet by 12% in a short period of time.

According to the official statement, the funds of the entire network have not been lost, but there is a problem with a transaction function, which causes the same block to generate different random numbers, resulting in the failure of the nodes in the entire network to synchronize successfully and generate blocks. Currently, the developers are fixing the problem. The Solana network will be upgraded pending a successful resolution of the issue.

Although Solana claims to have 50,000 tps high performance and low transaction costs, and it called the “Ethereum Killer” at the beginning, it has crashed many times this year, and nodes must restart the network for synchronization to continue to operate. Its stability Until now, it has not improved. As long as Solana goes down, it will have an immediate impact on the market. Bitcoin was still at $31,000 yesterday, and the crash of Solana immediately sent the market back to $29,000.

After the price index announcement, the US Fed will raise interest rates by two yards

However, the situation of the cryptocurrency market is not the same. Originally, the market was going to rebound with the US stock market, but the Solana crash caused the funds to be withdrawn. The current trading sentiment is quite low, and no positive news has appeared. Even if the US stock market continues to rebound, Bitcoin and There is no buying order for altcoins. In conclusion, we have not observed any signs of Wall Street speculative funds wanting to enter the crypto market to hype. They may think that the risk is too high, and it is better to grab the rebound of US stocks instead.

It is impossible to judge the future price trend based on the existing information in the market. The market seems to be empty, with only a few people trading. Some people are unwilling to sell at a low price, and no investors want to buy a lot at the current price. At $30,000 but unable to break through further, sellers were expecting a rebound in U.S. stocks to attract outside buying and lift the price of the cryptocurrency, but what the latter expected did not happen last week.

That is to say, on the premise that institutional funds have not given up on the cryptocurrency market, Bitcoin 30,000 is the bottom, and the cost of large households is also around 30,000 US dollars, but if there is no external buying, the bottom will continue for a period of time. If there are big fluctuations, I am afraid that some of them will not be able to withstand this trough. For example, Microstrategy is the last line of defense. If it needs to sell coins for cash if it loses its capital turnover, it may trigger a chain reaction after selling cryptocurrencies, which will be the worst in the market. Happening.

Now, the patience of investors in the currency circle is extremely tested. To be honest, we can’t predict how it will go. Everything depends on the risk control of major institutions. The situation is still risky. Everyone is struggling to support the cost zone. Even if the US stock market rebounds, The utility is only to hold the price of Bitcoin at $30,000, and no further breakthrough can be achieved, but if the US stock market crashes after the rate hike, it may bring the crypto market to collapse.