Source: xPanse World
The trading in June is expected to be extremely volatile. The data at 2 a.m. today did not signal bearishness, as it was positive. Additionally, due to it being the delivery date of 613, the price of BTC surged from a low of $66,051 to $69,999, a 6% increase. However, it then dropped back to $67,500.
zkSync faced backlash from the community for hoarding a significant amount of “rat warehouses,” leading to a delay in its launch. The revelation of nearly 60% of user addresses by zkSync caused an uproar in the community, prompting the decision to postpone the launch, which may create significant pressure on ZK’s listing. The creation of numerous addresses by the project team to build rat warehouses is a double-edged sword, as the question of whether to sell or not has become the most pressing concern for zkSync traders.
If selling occurs, there will be significant selling pressure on the market due to the concentration of rat warehouses. Since the airdrops did not create diversified addresses, the desire to sell is amplified, resulting in significant panic among traders post-listing.
If selling does not happen, it could lead to the project team controlling the market, causing the actual controllers of numerous addresses to act independently. With a large amount of chips not flowing into the market, trading volume could decrease. In a low liquidity scenario, stable price increases may occur, but this could still cause panic among traders once the price rises.
What is the terminal rate?
The terminal rate refers to the highest (or lowest) level of interest rates expected by the Federal Reserve in a cycle of rate hikes or cuts. This rate level signifies that the Federal Reserve believes it has reached an appropriate monetary policy stance for the economic conditions and indicates the end of the cycle of rate hikes or cuts.
The determination of the terminal rate is based on the Federal Reserve’s comprehensive assessment of the economic situation, including several key factors:
Inflation: One of the Federal Reserve’s main goals is to maintain price stability, aiming for around a 2% inflation rate. If the inflation rate is too high, the Federal Reserve may raise rates to a terminal rate to curb inflation; conversely, if the inflation rate is too low, the terminal rate may be lower.
Economic growth: The rate of economic growth also affects the setting of the terminal rate. Strong economic growth may require higher rates to prevent overheating, while weak economic growth may require lower rates to stimulate economic activity.
Employment situation: The Federal Reserve also focuses on the labor market. High employment and low unemployment rates typically accompany higher rates, while high unemployment rates may require lower rates to support employment.
Global economic environment: The uncertainty in the global economy and the monetary policies of other major economies also influence the Federal Reserve’s decision on the terminal rate.
The recent market decline was mainly driven by several positive data points, leading to temporary speculation about the Federal Reserve’s rate cut expectations.
Since Powell mentioned in his last speech that “consider a rate cut if the unemployment rate is 4%,” and the actual rate has not exceeded 4% for almost a year, the recent 4% data was not significantly higher than expected. The Federal Reserve did not focus heavily on the rate cut issue in the current environment.
Furthermore, the Democratic Party’s desire to urge the Federal Reserve to cut rates as soon as possible is brewing, but the Federal Reserve’s attitude towards rate cuts in the short term is not high.
When will the rate cut happen?
Currently, players in the circle are all concerned about the issue of the Federal Reserve’s rate cut, as a rate cut implies that economic development is moving in a positive direction.
After last week’s data release, the market speculation about a rate cut quickly subsided because the data remained stable with no significant adjustments or positive outlook.
Therefore, the timing of the rate cut is now of greater concern.
The terminal rate is currently showing data for September 18th, and as of now, the probability of a 25 basis point rate cut is 48.3%, higher than the probability of maintaining the rate at 525-550. This is currently the most critical turning point.
Therefore, in terms of the rate cut, I believe the probability of a rate cut in September is the highest.
Will June be a “bloody battle”?
Firstly, the market volatility in June could be significant, with a high bullish sentiment in the futures market, especially in the options market. The main options position is focused on the trading on the exercise date of 628, with the key pain point at $55,000.
The nominal amount of the options position on June 28th is $6.564 billion, with 65,800 bullish options worth $4.54 billion, accounting for 67% of the total nominal amount. This indicates a strong bullish sentiment in the market for the latter part of June, despite some hawkish views and opinions. Currently, the sentiment in the financial markets is optimistic.
The trading in June is expected to be extremely volatile. The data at 2 a.m. today did not signal bearishness, as it was positive. Additionally, due to it being the delivery date of 613, the price of BTC surged from a low of $66,051 to $69,999, a 6% increase. However, it then dropped back to $67,500.
As the weather is very hot now, everyone should take care of themselves and rest. The market in June will experience significant fluctuations, presenting a good opportunity for friends who enjoy short-term trading.
