Orange Evening Interpretation 7.28

The biggest thunderstorm in the weekend market has been lifted, as trade negotiations between the United States and the European Union have finally concluded. The outcome was a 15% tariff imposed on the EU in exchange for an additional $600 billion investment from the EU, as well as zero tariffs from EU countries on the U.S., continued purchases of U.S. military equipment, and plans to buy $750 billion worth of U.S. energy products. The market's reaction to this result is an increase.

Bitcoin reached a peak of 119,800, Ethereum hit 3,940, and altcoins experienced a wave of general increase. This is a release from last week's suppressed market conditions. The market is also worried that the EU might really impose a 30% tariff, leading to a tit-for-tat situation with mutual attacks. Although no specific details have been announced regarding the negotiations between the US and Europe, or the US and Japan, the explanations regarding investment returns are not very clear. For instance, Japan denied Trump's statement that 90% of the $550 billion investment from Japan in the US would benefit the US, stating instead that the US also needs to contribute financially. On the European side, negotiations just concluded, and there are already disputes, especially regarding pharmaceuticals and steel/aluminum tariffs. Europe also applies a 15% tariff, while the US insists on maintaining a 50% tax rate. However, the larger framework has basically been determined, and at least the market's biggest concerns about a crisis have been alleviated. Moving towards the August 1 deadline, the greatest uncertainty lies in negotiations with Canada, and the market generally expects a low probability of reaching an agreement with Canada, which may need to be postponed. Other countries, such as South Korea, are also likely to exchange investments for tariff concessions. Results should be available soon. Overall, this week is expected to see more positive outcomes from tariff negotiations.

In addition, this week is a super macro week, with ADP employment data on Wednesday, and trade talks between China and the U.S. in Sweden; at 2 AM on Thursday, the Federal Reserve FOMC will announce the interest rate decision, followed by a press conference with Powell at 2:30 AM. On Thursday evening, the initial jobless claims for the week will be released, along with the June PCE inflation data, making Thursday a day of significant data. On Friday, the Hong Kong stablecoin regulations will be officially implemented, and the U.S. will announce the July non-farm employment data and unemployment rate, as well as manufacturing PMI data and the July University of Michigan Consumer Confidence Index. In summary, this week will gather the FOMC interest rate decision, PCE inflation data, and non-farm employment report, which are the three most important macro events and data, along with the August 1 trade negotiation deadline and the earnings reports of four out of the seven tech giants in the U.S. stock market, making it a star-studded week. Therefore, be cautious with high-leverage contracts this week, as the market is prone to sharp fluctuations.

Speaking of the market, the weekend is still Ethereum's performance time. Last week, the cumulative net inflow of funds into Ethereum ETFs reached 1.846 billion USD, which should be a record if I'm not mistaken, and it far exceeded the 72.3 million USD inflow of Bitcoin last week. Moreover, 80% of the funds in Ethereum are contributed by BlackRock, indicating that it is still a time for leading investments, and secondary and tertiary institutions will follow suit. Additionally, the competition for ETH in Ethereum's treasury is becoming increasingly fierce. BMNR has already taken a substantial lead in the competition with SBET, with reserves now reaching 567,000 ETH, while SBET only has 361,000 ETH. It seems that traditional capital has stronger purchasing power. BMNR is indeed supported by big names like Peter Thiel and Cathie Wood, aiming to be the first. Similarly, BlackRock's ETHA is also a leading ETF. From the recent buying volume of ETH and the treasury, it is evident that the main funds driving this surge are coming from outside the market, while on-chain funds are experiencing a massive turnover. This is also why the price of coins is rising, as the amount unlocked daily far exceeds the newly staked amount. As I mentioned in my article last week, at this stage, any large-scale turnover is positive, as the average holding cost will rise, which also means that the future price ceiling of Ethereum will be higher. Meanwhile, as Ethereum takes off, it will also bring funds to the altcoin market. Whether Ethereum breaks 4000 or reaches ATH, it will be accompanied by the rise of altcoins. This has been a repeated story in past bull markets. Although the structure of altcoins in the market has changed this time, the leading projects in various sectors, along with the tiered allocation I provided for altcoins a few days ago, will generally benefit. Interested parties can look back.