Market closure August 2, 2024

The beginning of the month of August has not been especially good for international markets.

Although it ended on July 31, on the rise, it had already been making resistance points as a whole and the first days of August, it has turned red, to start the charts with monthly candles, for August, in profit-taking territory, on an international level.

Only Italy was saved this Friday, day 2, from relegation.?

DATA EUROPE

Large declines for the European markets, observing with 40% of the European market capitalization, the German DAX index lost 2.33%. The European benchmark index of the best 50 European companies, the Euro Stoxx index, lost even more, with a negative score of 2.71%.

DAX index Chart

Several months in possible distribution, in the attached graph with monthly frequency, we observe the bearish start, for August, of the German selective DAX.

It is not ruled out that there are even lower prices to be found during this month. Environments of 16,500 points, as the first important area, remembering that we are observing a chart with monthly candles.

Data from China, not negative (with the importance that China has for Germany), does not help either: The China Caixin manufacturing purchasing managers index declined to 49.8 in July from 51.8 in June, according to data released Thursday by Caixin Media Co. and S&P Global.

The reading slipped blow the 50 mark separating activity expansion from contraction, signalling that conditions in the manufacturing sector deteriorated, although only marginally.

DATA USA

Dow Jones wipes out 500 Points as Weak Data Shakes Investor Confidence.

The Dow Jones Industrial Average lost nearly 500 points, or 1.2%, on Thursday after weak data sparked a massive stampede in the broader stock market. Just one day after a big rise in Wall Street averages, a lot of bullish volatility seemed to come, investors pulled back and dumped consumer stocks, bank stocks and their technology companies, thus starting the month of August, with falls, somewhat expected in a certain way. The Nasdaq Composite lost 2.3% or most of its gains on Wednesday. And the large North American index S&P 500 fell 1.4%.

Lacklustre employment and manufacturing data released before the opening bell signalled some worrying setbacks in the economy. Not all that glitters is gold. Weekly jobless claims (or new claims for unemployment benefits) reached 249,000, exceeding estimates of 236,000. June manufacturing activity sank deeper into a slowdown for the second straight month, surprising analysts who had been expecting a jump. The news roiled markets just ahead of today's nonfarm payrolls data.

The selloff was especially painful for the tech giants.??

TSLA and NVDA fell approximately 7% each.

S&P 500 Chart

Last week, we were already talking about possible short-term weakness for the S&P 500, confirming that exceeding 5600 points could be an important resistance zone in the middle of summer.

On Friday, August 2, it closed at an important support, within moving averages in which the price is usually held, before deciding whether the fall continues.

CONSUMER PRICE INDEX (US)

Inflation readings continue to moderate, as evidenced by the y-o-y inflation readings and CPI/PCED/PPI reports.

The m-o-m readings confirm that the inflation trend is coming down.

DATA CRYPTO

We have August already starting and we continue to observe how the main crypto reference is in waiting areas.

Bitcoin Price Chart

At the start of the month, in bitcoin, and in principle, in the so-called intermediate zone of the bullish movement of the fifth era of bitcoin (after halving number 4, which occurred last April 2024), we would like to have a vision general, of the movement, to date, of the first theoretical first bullish part of bitcoin.

The price that began its great rise between September and October 2023 is in an accumulation zone in an intermediate zone, to try in the following months to continue climbing and achieving new ATHs.

Basically what we seem to be observing is a first zone of rise, from September/October 2023 to March 2024, and since then, a zone of pause and reaccumulation with theoretical support in areas of 52/58 K (The graph shown, only shows the closes of the day, not the intraday movements that can rise or fall more and then observe this close).

Bitcoin Fear and Greed Index

The Fear and Greed Index for bitcoin by Coinstats, is a tool that helps investors and traders analyse the Bitcoin and Crypto market from a sentiment perspective. Identify the extent to which the market is becoming too fearful or too greedy.?

We observe the FGI of bitcoin by Coinstats, at 37 points.

After reaching 81 points in March 2024, the FGI relaxes and we see descending maximums in said indicator. Yellow/orange colours appear in the first days of August.

Ethereum Fear and Greed Index

In the TOP2 crypto, ethereum, the observation of the FGI is very interesting.

75 FGI points were reached in 2021, and in the last increases, there has not been as much strength.

Indicating that although the price now drops somewhat, or remains around 3000/3600 USD, the "normal" thing is that in the second part of the crypto movement that may begin soon, the FGI figures will be higher. It is therefore time to wait and whoever likes to accumulate more, without this being a recommendation but rather a fundamental observation of the possibility mentioned.

Bitcoin stock-to-flow model

The stock-to-flow (S2F) model is a tool used to predict the value of scarce assets, such as gold and Bitcoin. The model was popularised by an analyst known under the pseudonym "PlanB." The central idea of the model is that the value of an asset is related to its scarcity. Let's look at the key concepts of the S2F model applied to bitcoin:

Key Concepts of the Stock-to-Flow Model

Stock: It is the total amount of the asset available at a given time. For bitcoin, this is the total number of bitcoins in circulation.

Flow: The amount of the asset that is produced or added to inventories during a specific period. In the case of Bitcoin, it is the number of new bitcoins that are mined each year.

Stock-to-Flow (S2F) Ratio: This is the ratio between stock and flow. A high S2F ratio indicates that the asset is more scarce.

Today:

Green, below the average, indicating that the price, according to this indicator on the chart, is in an accumulation or reaccumulation zone in an upward trend.

Legal warning: This content is for informational and educational purposes. There is no consumer protection. Your capital is subject to risks. It is not a recommendation to buy or sell any asset or crypto asset. Please do your own research (DYOR) or contact your trusted financial advisor.