Global macroeconomic turmoil puts pressure on the crypto market

US Employment Data Sparks Market Volatility

Since last week, the global economic situation has been turbulent. The U.S. employment data for July fell short of expectations, with only 73,000 new jobs added, far below the market expectation of 200,000, and the data for the previous two months was significantly revised downwards, causing market turmoil. This change in data led to the U.S. President firing the head of the Bureau of Labor Statistics and accusing him of data falsification, intensifying doubts about the credibility of economic data. At the same time, the sudden resignation of Federal Reserve Governor Christopher Waller created an opportunity for a new governor who might support interest rate cuts, leading to increased market expectations for a rate cut in September, while the yield on the U.S. 10-year Treasury bond briefly fell by 10 basis points to 4.04%.

Under the influence of these factors, coupled with new tariff policies and the pressure from increased oil production, global risk assets are facing challenges. The S&P 500 index fell 0.53% on Friday, and the Dow Jones Industrial Average dropped 0.43%. Market analysis indicates that despite strong performances from large tech companies, stock price reactions have been tepid, and small-cap stocks have been severely impacted, with the Russell 2000 index declining by 1.2%. The market breadth is notably insufficient, and funds are beginning to shift towards safe havens. New York Federal Reserve President John Williams believes that the labor market is slowly cooling but remains robust, and he holds an open but cautious attitude towards a rate cut in September. White House economic advisor Lael Brainard attributes the weak employment data to technical factors, expecting a rebound in the future. However, the market generally believes that the Federal Reserve is facing a contradictory situation with rising inflation and a weakening labor market, and the risk of policy missteps is emerging once again.

Breakthrough Progress in the RWA Field in Hong Kong

In the Asia-Pacific region, new progress has been made in the field of Real World Asset (RWA) tokenization. The world's first RWA registration platform is about to be launched, aiming to provide full-process services for the tokenization of physical assets. This platform has been approved by the Hong Kong Securities and Futures Commission and is expected to be officially operational by the end of September. Industry analysts believe that this marks an important step in regulatory innovation for Hong Kong in the RWA field, as establishing standardized processes will effectively enhance market compliance and transparency. The strong confidence of the capital market in the RWA sector is expected to further drive the research and development of related technologies and the implementation of commercial applications, injecting new momentum into the development of the digital economy in Hong Kong and the entire Asia-Pacific region.

According to the latest data, the RWA market in Hong Kong has grown by 150% over the past year, reaching $5 billion. It is expected that by 2025, this figure may surpass $20 billion. Several large financial institutions, including HSBC and Standard Chartered, have announced plans to launch RWA-related products in Hong Kong.

Bitcoin price volatility is severe, and analysts have differing predictions.

Bitcoin briefly fell below $112,000 over the weekend, hitting a low of $111,500, before rebounding and currently rising above $114,000. Market analysts believe that the price drop below $112,000 is related to the weakness in the U.S. job market, which could signal significant market changes. Renowned crypto analyst Michael van de Poppe pointed out that the global economy's weak credit growth is struggling to support economic expansion, and Bitcoin could drop to $100,000. Trader John Bolte also warned that if it cannot return to $116,000, the price may drop to $104,000.

However, CryptoQuant analyst Ki Young Ju expects the price may briefly pull back to $110,000 and believes that this level can provide effective support. Technical analysis shows that maintaining $112,000 is crucial for initiating a new round of upward momentum. Although reports indicate that August and September are typically weak months for Bitcoin, analyst Tom Lee predicts based on technical patterns that the reversal pattern for Bitcoin is still in play, with a target price potentially reaching $148,000.

Ethereum Faces a Critical Moment, Analysts Optimistic About Long-Term Prospects

On the Ethereum front, there are predictions that it may test the $3000 mark. Currently, the price of Ethereum is fluctuating around $1850, having dropped about 2% in the last 24 hours. Trader Sarah Tanner believes that the current price movement may be a false breakout and advises investors to proceed with caution. Analyst Jack Dorsey is focusing on the short-term opportunity for it to hit the 3.8K-4K range again and believes that the potential of the tokenized asset trust (DAT) model is underestimated, which could be key to attracting large inflows of traditional financial capital.

Ethereum has recently made significant technical progress. The latest Dencun upgrade has been successfully activated on the Goerli testnet, paving the way for the mainnet upgrade. This upgrade will introduce Proto-Danksharding technology, which is expected to greatly increase network throughput and reduce transaction costs.

Crypto analyst Raoul Pal has made an extremely optimistic prediction, suggesting that as Wall Street funds flow in, Ethereum's fair price could reach between $10,000 and $20,000 within the next 12 months. He noted that Ethereum is becoming the preferred choice for institutional investors, with its applications in DeFi, NFTs, and the metaverse rapidly expanding.

It is worth noting that the Ethereum Foundation recently announced an important decision to gradually sell approximately 700,000 ETH over the next five years, accounting for about 0.6% of the total circulating supply. This move has raised concerns in the market about supply pressure, but it is also seen as a signal of the maturation of the Ethereum ecosystem.

The Performance of AI-related Tokens is Outstanding

Over the weekend, tokens related to the concept of artificial intelligence saw an overall increase, with female AI companion concept tokens rising 45% in 24 hours, from $0.15 to $0.2175; male AI companion concept tokens surged even more, increasing by 103%, from $0.05 to $0.1015. This phenomenon reflects the market's ongoing optimism regarding the application of AI technology in the social and entertainment sectors.

Personal Opinion

In the current complex market environment, investors need to remain vigilant and flexible. Although weak macroeconomic data may trigger short-term fluctuations, the long-term outlook for the crypto market remains optimistic. In particular, with the continued entry of institutional investors and advancements in technology, Bitcoin and Ethereum are expected to achieve significant growth in the coming years.

Hong Kong's innovative initiatives in the RWA field are worth noting, as they may open new paths for the integration of traditional and digital assets. However, investors should also be aware of potential regulatory risks and market volatility.

Regarding the rapid rise of AI-related tokens, I advise investors to remain cautious. While AI technology does have enormous potential, the value of related tokens needs time to be validated. Investors should focus on projects with real applications and robust business models, rather than blindly following short-term trends.

In this complex and ever-changing market environment, investors need to closely monitor global economic indicators and policy directions, carefully assess risks, and adjust investment strategies appropriately. Diversification and long-term holding remain effective strategies to cope with market uncertainties.