Institutions Unanimously Disagree How Will the Market Develop in the Future

Original | Odaily Planet Daily
Author | Azuma
Institutions with Collective Bullish Views
Turning the clock back to last week, it was almost the most consistent period of bullish expectations from institutions after the market entered a consolidation phase in March.
On June 3rd, Bitfinex stated that the decline in Bitcoin since March may have been due to long-term holders selling off, but on-chain data shows that this trend has stalled and investors are accumulating Bitcoin.
On June 4th, CryptoQuant pointed out in a report that 50% of long-term Bitcoin supply is in an “inactive” state. In the wallets tracked by the institution, there has been no change or movement in the amount of Bitcoin held. This is considered a strong signal of long-term holding, which may indicate further price increases.
On the same day, Matrixport officials posted on X platform that with the market sentiment turning bullish, the funding rate for Bitcoin has been positive for the past few weeks. Futures contract positions have also increased in the past 24 hours, indicating that quick traders (futures traders) expect Bitcoin to continue rising.
On June 5th, 10x Research boldly predicted in a market analysis text that Bitcoin is expected to reach a new all-time high next week (this week), with prices possibly exceeding $73,500.
On June 7th, BitMEX founder Arthur Hayes, who has a good track record, also stated in a post that the cryptocurrency bull market is awakening, and it’s time to redeploy excess dollar liquidity into altcoins.
Clearly, the market’s unpredictability has once again been demonstrated in the trend of the past few days.
Continued Market Decline
Starting from the evening of June 7th, the cryptocurrency market has once again suffered a heavy blow.
According to OKX quotes, BTC has been continuously falling since that evening, reaching a low of 66,870.1 USDT at one point, with a recent 24-hour decline of 3.41%; ETH also fell below the $3,500 mark, reaching a low of 3,498 USDT at one point, with a recent 24-hour decline of 3.96%.
The altcoin market is “bleeding,” with most mainstream coins giving back the gains from the surge sparked by the Ethereum spot ETF expectations about half a month ago, except for a few tokens in some sectors (like Meme and PEOPLE). As of the time of writing, SOL is trading at $153.52 USDT, with a 24-hour decline of 4.05%; TON is trading at $6.87 USDT, with a 24-hour decline of 3.37%; ARB is trading at $0.94 USDT, with a 24-hour decline of 3.3%; TIA is trading at $8.83 USDT, with a 24-hour increase of 4.06%…
Due to the overall market downturn, the total market value of cryptocurrencies has also rapidly declined. According to CoinGecko data, the current total market value of cryptocurrencies has fallen to $2.58 trillion, a 3.2% decrease in the past 24 hours.
In terms of derivative trading, Coinglass data shows that there were $172 million in liquidations across the entire network in the past 24 hours, with the vast majority being long positions liquidated, totaling $148 million. In terms of currencies, ETH, rarely seen, surpassed BTC to become the main liquidation area, with a total of $46.33 million liquidated, while BTC liquidations amounted to $38.92 million.
Macro News Influencing the Overall Situation
Looking back at the recent market trends, it can be said that they are highly related to macro news.
Adam, a macro researcher at Greeks.live, also mentioned this point in last week’s market summary: “The BTC market this month will probably be strongly related to macro news of the Fed rate cut, while ETH trends will mainly be influenced by news of ETF approvals.”
Especially since last week, consecutive rate cuts by the Bank of Canada and the European Central Bank have raised expectations for a Fed rate cut, leading to overall good performance in the entire risk investment market. This has been reflected in the crypto market, with BTC ETF seeing positive inflows for 19 consecutive trading days and overall optimistic market sentiment.
It is in this context that institutions have made bullish predictions one after another. However, with the unexpected results of the unemployment rate data and non-farm payrolls data announced on the evening of June 7th, especially the astonishing addition of 272,000 new non-farm jobs, far exceeding the market’s expected value of 185,000, the market’s expectations for a rate cut this year have once again decreased, dealing a blow to risk market sentiment, including cryptocurrencies.
QCP Capital also emphasized this situation in its latest market analysis: “The unexpected and above-expectation non-farm payroll data, along with the rise in unemployment rate, is enough to trigger risk aversion before the release of US inflation data and the FOMC meeting next Wednesday.”
However, QCP Capital also predicts that this downturn is a good buying opportunity on dips, as the market will increasingly digest the impact of the Fed’s expected rate cut at least once. With other countries around the world continuing to cut rates, the US will find it hard to ignore this.
Focus on Interest Rate Decisions
In the current market situation, the most significant potential events affecting the market this week are the CPI data to be released on Wednesday and the expected Fed interest rate decision to be announced on Thursday, especially the latter, which could have a directional impact on future market trends.
In addition to QCP Capital mentioned earlier, many institutions also emphasize the need to pay close attention to the results of these events this week.
Adam, a researcher at Greeks.live, stated that in addition to the CPI and Fed interest rate decisions, the Bank of Japan’s interest rate decision on June 14th is also worth noting. Considering that the volatility brought by ETH ETF has completely subsided, continuous inflows of BTC ETF, and overall optimism in the cryptocurrency market, it may be a good idea to buy call options for the week at lower IV prices in the short term.
Lin Chen, the head of Deribit’s Asia-Pacific business, said, “Early Thursday morning is the US FOMC rate meeting, and the subsequent press conference is very crucial. A single sentence could increase rate cut expectations, leading to a surge in BTC. But generally, by next Tuesday or Wednesday, many institutions may sell assets to hedge (causing BTC retracement) out of fear of dovish remarks from the Fed, which could cause BTC to fall. The clearest opportunity is actually in case of a drop, where bosses quickly build spot positions or sell put options. Generally, in this kind of Fed scenario, if there is an overly dovish statement, it will be maintained next time, and the market will rebound.”
Bloomberg analyst Ryan Weeks emphasized that if there are unfavorable rate results, the market may come under further pressure: “The inflation data and Fed prospects announced on Wednesday could exacerbate concerns about rates remaining high for a longer period, which is a challenging situation for speculative assets like cryptocurrencies.”
In conclusion, based on predictions from various sources, the focus of the market this week will be on the two major data releases on Wednesday and Thursday. It is unlikely that there will be significant changes in the market before that, and Odaily Planet Daily will provide updates on related developments as soon as possible. Stay tuned.