Macroeconomic and Market Analysis

Analysis of Trump's Policy Context

1. Inflation Reduction Path

• Promote peace between Russia and Ukraine, release Russian oil and gas resources, and lower global energy prices.
• The situation in the Middle East may trigger new conflicts, pushing oil prices higher in the short term but controlled through diplomacy.
• Increase import tariffs, leading to a mild economic recession in the short term, and suppressing inflation.
• Apply tariff pressure on China, initiate negotiations or implement economic blockades.

2. Interest Rate Path

• Pressuring the Federal Reserve to cut interest rates and expand its balance sheet to stimulate global liquidity.
• Promote digital currency legislation, accelerate its development, and weaken the Federal Reserve's monetary control.

3. Stimulating Economic Path

• Permanent tax reduction policy, increasing disposable income for businesses and individuals
• Implement differential tariffs on the manufacturing industry to protect domestic industries.
• Lock in large-scale foreign investments through visits.
• Expand oil and natural gas extraction, increase energy export revenue
• Explore territorial expansion and expand the economic landscape

4. Path of Political Familism

• Accumulate family wealth through digital currency policies
• Strengthen the loyal team to ensure policy continuity

Logical Summary

Trump's policies are centered on economic stimulus, aiming to reduce inflation and interest rates through various means, while attracting investment and developing energy to stimulate growth. He also consolidates power and family interests through territorial expansion and political purges. The overall strategy is aggressive in the short term, with long-term effects relying on diplomacy and policy execution.

Neutral Interest Rate

Market predictions suggest a 25 basis point rate cut on September 17, 2025, with two rate cuts throughout 2025 bringing the rate down to 4.00%, and the neutral rate rising to 3.50%. Currently, there is a game of chess between the Federal Reserve and the Trump administration regarding whether to initiate rate cuts early. The effects of Trump's tariff policy are gradually becoming apparent, resulting in a slow recession. Meanwhile, the Federal Reserve has continued to reduce its holdings of U.S. Treasury bonds recently, tightening liquidity, which has led to a bullish adjustment in the global M2 indicator BTC.

Key Events and Data to Focus on Next Week

In the coming week, several important economic indicators will be released, including PMI data from various countries, unemployment rates, and inflation data. At the same time, attention should be paid to speeches and policy statements from central bank officials in various countries. These events and data will have a significant impact on market trends.

On-chain Data Analysis

1. Stablecoin capital flow

This week, the market has significantly shrunk, with a week-on-week decrease of 76.4%. The daily average issuance is only 0.78 billion, indicating a state of low liquidity. This may suggest that the market lacks direction, trading volume is shrinking, and large players and institutions are on the sidelines, with no intention of entering the on-chain funds. If the market continues to be sluggish next week, it can be confirmed that the market has entered a cooling period.

2. ETF capital flow

This week, ETF inflows dropped from 2.8 billion the previous week to 670 million, a 76% slowdown in inflow pace. This indicates a temporary decline in ETF enthusiasm, with BTC prices highly dependent on ETF fund inflows and lacking support from natural buying in the market.

3. OTC Premium/Discount

The OTC premium for USDT and USDC remains around 100.0%, with minimal fluctuations, indicating a clear wait-and-see attitude among funds and easing liquidity. Overall, it is at the "zero premium" or "slight discount edge," suggesting insufficient buying pressure in the OTC market and a lack of new fiat currency entry momentum.

4. Exchange Balance

The exchange balance ratio of BTC continues to decline to 15.046%, reaching a one-year low, with significant reduction in on-chain selling pressure. The exchange balance ratio of ETH, on the other hand, has risen from 13.52% to 15.83%, indicating some selling situation.

5. Distribution of Holding Addresses

The number of BTC holding addresses between 1K-10K showed a significant decline on the 26th-27th, indicating short-term bearish signs, but was absorbed by addresses holding between 100-1K. In the short term, the outlook is bearish, but there are no significant changes in the market structure in the medium to long term.

Market Outlook

Considering all the data, the market may continue to pull back next week, especially after ETH rises again. Overall, there is a trend of capital withdrawal and a wait-and-see sentiment, increasing the risk of a short-term pullback.