This may be the most comprehensive analysis of the decline of BTC and ETH today. There are a lot of words, so don’t read if you don’t like it.

SpaceX's sale of BTC caused the overall decline of the currency market this morning. I think this is what everyone has heard. A more advanced content is that SpaceX did not sell BTC recently, but has sold BTC worth $373 million in 2021 and 2022. A more complete statement is that SpaceX still holds some BTC, but the specific amount is currently unknown. Only a part of it has been sold. If you have read Tesla's financial report, you should know that Tesla also wrote down the stock of BTC in 2021 and 2022, so SpaceX should be consistent with Tesla's operating plan, because Tesla is a listed company that needs to disclose detailed financial details, so according to Tesla's inference, it is very likely that SpaceX still holds 25% of BTC reserves.

If calculated this way, after the sales in 2021 and 2022, SpaceX should still hold $127 million in BTC. If SpaceX, like Tesla, had its last impairment in the third quarter of 2022, the average price of BTC would be around $21,000 at that time. If SpaceX purchased in 2021 at a slightly higher price, SpaceX would still have around 5,000 BTC, which should be slightly less than Tesla's stock, but the difference is not huge. After figuring out this issue, let's go back to the decline this morning. It would certainly be wrong to say that it was all caused by SpaceX's information, but it is true that this news has increased the market's bearish sentiment in terms of time.

The news was released at 15:22 pm Eastern Time, which is 4:22 am Beijing Time. After all, many friends did not read it carefully and thought that SpaceX wrote down BTC in this earnings season, out of pessimism about the future of BTC. In fact, although the trading volume did increase and the price of BTC and ETH fell at 4:50 am Beijing Time after the news came out, it was not serious. Ten minutes later, the price almost returned to the level before the decline. From the detailed picture, we can see that the main decline started at 5:40 am Beijing Time. Binance's trading volume began to surge, and the price of BTC fell by more than 10% in 5 minutes. At this time, it was nearly an hour since the announcement of SpaceX's write-down.

It can be said that the impairment of BTC by SpaceX is just a fuse, and this fuse is constantly fermenting to stimulate price changes. In fact, the main reasons for the decline in the prices of BTC, ETH and even the entire currency market are still multifaceted. On the one hand, there are a lot of FUDs in the market saying that the SEC will reject all ETFs until 2024. In fact, there is no such statement in the SEC's information. It is just speculation, not announced by the SEC itself. However, the possibility of approving BTC's spot ETF before 2024 is indeed very low. However, such remarks still overwhelmed many investors who were betting that BlackRock's application would be approved in the short term. I remember that after BlackRock just submitted its application, there was a lot of information in the market predicting that BlackRock would be approved in August, and now it has been directly pushed to 2024, which is bound to be a big blow to emotions.

Especially with the information about SpaceX selling BTC, it may also trigger the illusion that SpaceX believes that the ETF will not be approved in the short term, so it sold it in advance. Another is the concern about the Fed's interest rate hike. If SpaceX is the fuse and BlackRock's ETF is the emotion, then the Fed's meeting minutes is the supercharger. After all, we have done many multi-faceted analyses. When U.S. stocks, especially technology stocks, fall, the probability of BTC and ETH following the decline will be very high. The funds out of the U.S. stock market have not entered the currency market, but more have entered the money market funds (buying U.S. bonds, etc.). Because it is expected that the Fed will break the current stage of suspending interest rate hikes by at least raising interest rates once, the sentiment of the U.S. stock market has been hit hard.

Especially since August, the market has been plagued by negative news. Fitch has downgraded the US credit rating, S&P is preparing to downgrade some US banks, and the slow development of some countries has affected the US bulk exports, etc., which are gradually suppressing the trend of US stocks. As of the closing of US stocks this morning, the Nasdaq 100 index fell by 1.08%, and the S&P 500 fell by 0.77%. These are the market's reactions to negative sentiment, and this reaction began to ferment before the SpaceX information was transmitted. This is because the current currency market is mainly looking forward to BlackRock. Although the Fed's interest rate hike is emotionally negative, there is still the possibility of gaming.

The reason for the huge drop in the price is that too many chips are concentrated at $29,000. We have been talking about this for a long time, especially in the update the day before yesterday, which emphasized that the stock of $29,000 had exceeded 1.136 million. I have never seen data from the past two years that exceeded 1.1 million. This shows that the current stock has reached the upper limit of pressure, and the only thing left is the choice of direction. Even now after the big drop, there are still more than 1.01 million. If the news of SpaceX buying BTC appeared early this morning, it would not be a problem to return to 30,000, but unfortunately the editor of the Wall Street Journal may not have thought of it himself. There are only 49 words in total, but it caused the largest market value drop in the currency market since the bankruptcy of FTX.

At this point, the overall process is very clear. First, the delay in BlackRock's ETF application led to low sentiment, pulling BTC down from US$32,000 to around US$29,500, and due to long-term fluctuations at US$29,000, it has accumulated the largest single price stock since this bear market cycle. Next is the possibility of another rate hike by the Federal Reserve, which has shattered the possibility of a suspension of interest rate hikes in 2023 for many investors, which means that it will be difficult to enjoy the benefits of a suspension of interest rate hikes in the third or even fourth quarter. When U.S. Treasury yields rose, they left the niche market one after another. Both the U.S. stock market and the currency market were affected. At this time, the price of BTC had dropped to around US$28,000, and then SpaceX's "outdated news" detonated the overall sentiment.

Although there is an ETH futures ETF that has passed the SEC's approval, there are already BTC futures after all. Wall Street is also optimistic about ETH. The SEC has also corrected the statement that ETH is a security, so the ETH futures ETF does not have much interference and its help for sentiment is very limited. The current narrative focus is still on BlackRock's BTC spot ETF and the Fed's suspension of interest rate hikes. So even if there is a black swan like SpaceX, we can still see that there are more than 1 million BTC piled up at $29,000. But now, there are only about 500,000 BTC in stock at $26,500, which does not pose a threat. Moreover, the pricing for BlackRock is only $500 now. Even in April, despite multiple negative news, BTC insisted on holding $26,000. I wonder if it can continue to hold this time.