Daily News |The likelihood that the Federal Reserve will maintain interest rates as they are in June stands at 85.7%. The US spot Bitcoin ETF reduced its holdings by 8,107 BTC yesterday

Crypto Daily Digest: The likelihood that the Federal Reserve will maintain interest rates as they are in June stands at 85.7%. The US spot Bitcoin ETF reduced its holdings by 8,107 BTC yesterday, while the Hong Kong Bitcoin ETF currently has 4,088 BTC in its possession.

According to the latest data from CME’s “Fed Watch,” the Federal Reserve is highly likely to hold interest rates steady in June, with a 85.7% probability, while the chance of a rate cut of 25 basis points is at 14.3%. As for the longer-term outlook, the odds favor the Fed maintaining current rates through August at 65.4%, with a 31.3% likelihood of a cumulative cut of 25 basis points and a 3.4% probability of a more aggressive cut totaling 50 basis points.

Farside Investors data indicates that on May 2, Grayscale’s GBTC experienced a net outflow of $54.9 million, while Franklin’s EZBC saw a net inflow of $3.4 million. Additionally, Bitwise’s BITB reported neither inflows nor outflows of funds on that day.

The first six Bitcoin and Ethereum spot ETF funds launched in Hong Kong had a total transaction volume of HK$68.4 million yesterday, and the Hong Kong Bitcoin ETF currently holds 4,088 BTC.

Friend.tech has rescheduled its $5 million FRIEND token airdrop event to take place on May 5.

Following community backlash regarding the contentious airdrop, the Eigen Foundation plans to distribute roughly $1,000 worth of EIGEN tokens to each of its over 280,000 wallet holders in an upcoming airdrop.

The io.net airdrop increased from 7.5 million io to 17.5 million io in the first quarter, and the initial circulation volume shrank from 225M to 112.5M.

The decentralized AI training platform Triathon has launched the second phase of TDO. TDO (Test Driving Offering) is the Web3 industry’s first encrypted asset issuance platform launched by the Trias ecological project Triathon. TDO uses Trias’ layer-1 trusted computing technology and Triathon AI technology to ensure a safe and trustworthy asset issuance process.

Michael Saylor, the utive Chairman and Co-Founder of MicroStrategy, has expressed his view that the SEC may categorize Ethereum as a security in the upcoming summer. He also anticipates that the SEC will consequently deny the spot ETF applications associated with Ethereum that have been filed by various asset managers, including industry giant BlackRock.

Analysts at Raymond James have reported that several employees of Coinbase, encompassing four high-ranking utives, collectively sold shares amounting to $383 million in the first quarter.

Artificial intelligence cloud service provider CoreWeave completed a $1.1 billion Series C round of financing, led by Coatue.

Block, as the payment firm of Jack Dorsey, has started uting a dollar-cost averaging (DCA) strategy, allocating 10% of its monthly gross profits toward augmenting its substantial Bitcoin (BTC) holdings.

Market Analysis: BTC persists in fluctuating around the $60,000 mark, while the altcoin sector experiences a rapid rebound.

General trend:
Bitcoin (BTC) saw a recovery from its dip to approximately $57,000, climbing to around $59,000 yesterday. The cryptocurrency appears to have found temporary support near the 120-day moving average, a level often considered a battleground between bullish and bearish sentiment. The race to secure the $60,000 level is intensifying as both bulls and bears vie for control.

Currently, Bitcoin has closed with green weekly candlesticks for the fifth consecutive week, indicating a continued weak performance in price. The liquidation threshold for the market’s long leveraged positions is set below the $50,000 mark, suggesting that the wave of liquidations for these leveraged positions could be approaching its conclusion.

Analyzing capital movements, nine spot Bitcoin ETFs in the United States, Grayscale included, sustained net capital outflows this week, with a notable decrease of 8,107 BTC (valued at roughly $478.22 million) just yesterday. Concurrently, Bitcoin Whale Mr. 100 acquired 4,000 BTC yesterday, while the holdings of the Hong Kong Bitcoin ETF stand at 4,088 BTC. Additionally, firms like Jack Dorsey have also started to incrementally add Bitcoin to their portfolios.

Recent studies suggest that the cryptocurrency market has undergone considerable profit-taking in the past few weeks, with retail investors driving a larger portion of the sell-off compared to institutional participants.

Market Hotspots:
Solana Ecological Sector: In the Solana eco, a hub of consistent market interest, key tokens have rebounded as the market found its footing. Notable tokens with substantial market caps in the eco saw widespread gains, with JTO, WIF, SOL, and JUP topping the charts, posting 24-hour gains of 21.97%, 17.08%, 11.74%, and 11.09% respectively. This surge highlights the robustness and vitality of the Solana ecological projects.
Oracle sector: The oracle sector, which previously suffered a decline of over 60% from its high point, is now exhibiting signs of recovery, with a pronounced rebound observed both yesterday and today. Leading the chart in the past 24 hours are tokens such as TRB, AE, API3, and DIA, with impressive gains of 64.52%, 11.47%, 9.57%, and 9.01%, respectively, showcasing a resurgence in this key blockchain segment.

STRK: StarkNet (STRK) is a permissionless, decentralized ZK-Rollup that functions as an L2 (Layer 2) network on top of Ethereum. It empowers decentralized applications (dApps) to scale their computational capacity infinitely while retaining the composability and robust security of the Ethereum blockchain. Similar to Optimism (OP), StarkNet is an L2 sector token that has demonstrated notable resilience amidst the recent bearish market trends. It has recently posted a 24-hour increase of 4%, with a circulating market capitalization of $946 million.

DEGEN: DEGEN, a prominent meme token on the Base chain, is currently leading the pack in the MEME sector with a notable 24-hour surge of 21.49%. The DEGEN project team has recently introduced DegenChain, capturing the market’s interest as it explores the new potential of Layer 3. The excitement continues as Airdrop 2 Season 3 has opened for subions, with the anticipation building for the launch of Season 4.

In conclusion, with Bitcoin’s price descent pausing, sectors like Solana, MEME, L2, and cross-chain have spearheaded a recovery, pushing the overall crypto market cap back over the $2.3 trillion mark. Despite this, the lingering bearish macro environment has led to increased caution in speculative investment. Continued observation is necessary to determine if Bitcoin’s current price stability will translate into a lasting rebound. Without a notable upswing, the market may be poised to continue its prior downtrend, making the recent recovery a temporary halt in the bearish trajectory. Additionally, the significant Bitcoin purchases by a whale have sparked a sense of Optimism for the market’s future, and close attention is required for large transaction activities in the near term.

Macro: The Federal Reserve’s stance on interest rate cuts remains unwavering, though the implementation is scheduled for a later date. Markets are closely monitoring the non-farm payroll data set to be released tonight

In our yesterday’s piece, we delved into the actions and resolutions from the Federal Reserve’s May interest rate meeting. The Fed declared its intention to keep the federal funds rate steady between 5.25% and 5.5%, marking a 22-year peak. This decision aligns with what had been anticipated by market predictions.

Indeed, the Federal Reserve has maintained the interest rates steady, opting for no changes for six consecutive sessions since September 2023. Prior to this period of stability, the Fed had implemented a series of interest rate increases, cumulatively raising rates by 525 basis points since March 2022 over the course of two rounds of hikes.

In the May announcement, the Federal Reserve underscored factors to consider in future interest rate decisions will include future economic indicators, economic projections, and risk assessments. The Fed also stressed it will not consider a reduction in interest rates until there is substantial confidence that inflation is reliably trending towards the 2% objective.

Regarding inflation, despite a moderation in inflationary pressures over the past year, levels remain high. The Federal Reserve noted in its comparison with the March statement that there has been an absence of considerable recent advancement towards achieving its 2% inflation goal.

It’s noteworthy that the Federal Reserve has revised the criteria for interest rate reductions, shifting from an average target (where the core inflation rate averages 2%) to a discrete metric (an unemployment rate increase of 0.2%). This adjustment effectively reduces the threshold for enacting rate cuts. From this perspective, the Fed’s determination to maintain the stance on interest rate cuts is evident; however, the precise timetable for rate reductions will need to be developed and refined, taking into account a range of economic indicators.

Market participants are looking forward to the release of the U.S. unemployment rate and non-farm payrolls for April, scheduled for 20:30 Hong Kong time. It’s important to highlight that the “small non-farm” ADP employment data released earlier this week indicated that U.S. ADP employment rose by 192,000 in April, surpassing the forecasted 180,000. Additionally, the figure for March was revised upward from 184,000 to 208,000, signaling that the U.S. labor market continues to exhibit strength and robustness.

Some market analysts suggest that Chairman Jerome Powell’s comparatively dovish remarks during this month’s FOMC meeting may have been influenced by an early look at the forthcoming employment figures. His stance appears to reflect a conviction that interest rates have hit their peak, introducing the possibility of a rate cut in the future, even amidst persistently high inflation.

In the realm of the capital market, all three major U.S. stock indices ended higher yesterday, with the Nasdaq climbing 1.51%, the S&P 500 increasing by 0.91%, and the Dow Jones Industrial Average rising by 0.85%. Furthermore, major technology stocks bounced back from recent losses, beginning an upward trajectory. This bullish momentum in capital market is sync with the optimistic sentiment observed in the crypto market.

Powell’s recent comments indicate that, despite the ambiguity surrounding the job market’s strength, the Federal Reserve is committed to its course of persistent interest rate cuts. It’s crucial to observe tonight’s release of the non-farm payroll and unemployment data, as these indicators have the potential to influence the market’s immediate direction.