August crypto market: Fluctuation intensifies, Bitcoin hits new high volume, beware of high position turnover risk.

robot
Abstract generation in progress

Crypto Market August Observation Report

In the context of the lack of a clear turning point in liquidity mentioned in the July report, changes in the macro environment have dominated market sentiment. From expectations of interest rate cuts and concerns about economic recession to the contraction of yen liquidity, there has been a sharp increase in volatility.

As of the writing of this report, the market has shown a strong rebound. However, an undeniable fact is that at relatively high levels, risk assets under the global dollar system have generally experienced significant increases in trading volume and volatility. This indicates that the market is undergoing a gradual turnover process, so great caution must be maintained regarding subsequent trends, and market movements should be closely monitored.

From an overall trend perspective, mainstream cryptocurrencies such as Bitcoin have quickly rebounded after a significant pullback near the annual line, indicating that the major trend still exists. However, Ethereum's performance is weaker than other coins as expected, having broken below the rising trend line. Although the current position does not warrant excessive pessimism regarding its exchange rate, caution is still needed for future developments.

Market Overall Trends and Analysis

After months of low volatility, the market delivered an unexpected shock to participants at the beginning of August. Since the trading volume stopped significantly shrinking at the beginning of July, market volatility has noticeably increased. This drop occurred over the weekend, accompanied by a large amount of trading, with emotions spilling over like a flood. The VIX index of the U.S. stock market surged to levels seen in March 2020, and the volatility of risk assets amplified simultaneously, with Bitcoin recording the largest single-day trading volume of this cycle.

Notable phenomena include:

  1. As the Ethereum exchange rate touches the lower bound of the descending channel again, a large number of small market cap cryptocurrencies have fallen to new lows for the year or even historical lows. However, amidst the generally pessimistic sentiment towards small coins in the market, some coins that have been adjusting for more than 3 months are beginning to show signs of bottoming out.

  2. The return of weekend trading volume suggests that volatility may start to converge again. We may continue to witness chaotic fluctuations of large-cap tokens represented by Bitcoin within the diffusion channel. However, in the context of insufficient liquidity, the ups and downs of the market may be smoother, and the frequency of divergences may also decrease.

  3. The market has not had any significant profit opportunities for over 3 months, and on-chain GAS fees continue to hit new lows. We are in a triple low of sentiment, funds, and hotspots, which may be a signal that the market is about to warm up.

Overall, while we have observed some positive signals, the most important factor is the high trading volume high turnover phenomenon of Bitcoin at this position, which is forming alongside global risk assets. This means that we must maintain a cautious attitude, as there has been no substantial change in liquidity. A conservative strategy should be adopted when the market shows signs of weakness next time. The aforementioned positive signals are more of a tactical optimistic consideration; at this time, it is crucial to avoid being affected by significant price fluctuations on one's mindset and net worth. Being well-prepared for the next phase of the market is the wiser choice.

Analysis of Small-Cap Crypto Market

The small-cap crypto market is experiencing severe divergence in trends, presenting a chaotic state. Some strongly performing coins have recently shown a rebound and bottoming trend, such as SAGA, SUI, TIA, and SATS, but they have not managed to create a ripple effect to drive the entire sector. Other coins continue to fall below support levels, creating new lows. Considering the current lack of market liquidity, trading in small coins remains quite difficult. It is recommended to adopt a wait-and-see approach and to consider entering only after a clear trend is established.

BTC0.28%
View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • 5
  • Repost
  • Share
Comment
0/400
BrokenDAOvip
· 11h ago
Ah, another round of suckers being played for suckers has started.
View OriginalReply0
GasFeeCrybabyvip
· 11h ago
I lost money again, the market trend is really hard to understand.
View OriginalReply0
DYORMastervip
· 11h ago
The Japanese have really screwed everyone over this time.
View OriginalReply0
failed_dev_successful_apevip
· 11h ago
The market hasn't collapsed yet, the time to buy the dip hasn't come.
View OriginalReply0
GateUser-c799715cvip
· 11h ago
Roll it up, brothers.
View OriginalReply0
Trade Crypto Anywhere Anytime
qrCode
Scan to download Gate app
Community
English
  • 简体中文
  • English
  • Tiếng Việt
  • 繁體中文
  • Español
  • Русский
  • Français (Afrique)
  • Português (Portugal)
  • Bahasa Indonesia
  • 日本語
  • بالعربية
  • Українська
  • Português (Brasil)