WCR: Weekend Crypto Market Sees Strong Rebound, Market Focused on This Week's CPI Data and Institutional Demand

August 11th. QCP issued its daily market observation, stating that during the low-liquidity weekend period, the crypto market witnessed a strong rebound. Bitcoin broke through $122,000 and approached its all-time high, completely recovering from last week's decline. Ethereum performed outstandingly, rising by 21% in the past seven days and breaking through $4,300 for the first time, hitting a new high since 2021. Since mid-July, the correlation between Bitcoin and the stock market has increased significantly. Therefore, today's outperformance in the crypto market is in line with the overall trend of rising risk appetite. The U.S. stock market rebounded close to its historical high after a brief pullback following the release of last week's job data, almost ignoring the impact of new tariffs and macro uncertainty. Under the strong bullish momentum, the market's short-term focus is now on the U.S. Consumer Price Index (CPI) to be released on Tuesday. The market generally expects the year-on-year inflation rate to rise by 10 basis points to 2.8%. If the data is lower than expected, it may further solidify the market's expectation of a Fed rate cut in September. Especially after several Fed officials recently turned dovish, a rate cut is almost a certainty. Whether this can drive crypto assets to new highs remains to be seen. Conversely, if the CPI data is higher than expected, the upward trend may pause, and the crypto market will consolidate along with the broader market. As a result, some traders are starting to hedge event risk. There is an increased demand for Bitcoin put options in the $115,000 to $118,000 range to protect against a sudden downturn. These defensive actions coexist with buyers repositioning at the top to purchase call options. It is expected that the front-end volatility will remain high before the data is released. If Bitcoin fails to effectively break through resistance afterward, the volatility may narrow. As Bitcoin approaches its all-time high, institutional demand and spot ETF inflows will be the key areas of focus. While the price is in a critical resistance range, partial profit-taking may occur before the CPI release. However, the market has recently been able to absorb selling pressure from "whales" without losing momentum, further supporting our structural bullish view.