Gate Research: Warsh Expected to Accommodate Rate Cuts in the Short Term | Market May See a Technical Rebound

Crypto Market Overview

BTC (+1.74% | Last price: 77,765 USDT): After a sharp sell-off, Bitcoin is currently trading in the USD 77,000–78,000 range. Over the past two weeks, BTC has fallen by roughly 20%, during which more than USD 1.6 billion in leveraged crypto positions were forcibly liquidated. Following this concentrated deleveraging, macro policy has become the core driver of Bitcoin’s price revaluation. If market expectations shift toward more cautious rate cuts, the policy environment would be unfavorable for assets reliant on cheap leverage and abundant liquidity. From a technical perspective, strong resistance is present above USD 90,000, while solid support lies around USD 73,000. A break below this level would likely open the door to the next downside target near USD 72,000, corresponding to the cluster of highs from March to June 2024.

ETH (+1.48% | Last price: 2,293 USDT): On the daily chart, Ethereum’s bullish structure has broken down. In the latest sell-off, ETH easily fell below USD 2,400; once this level was breached, liquidation mechanisms kicked in, sending prices almost vertically down to the USD 2,100–2,200 demand zone and putting pressure on the psychological USD 2,000 level. The current market structure is bearish, with each rebound meeting selling pressure, making it difficult for prices to reclaim USD 2,400. Overall, the market is still searching for a new support level and has not fully flushed out excess positions. Recent upside moves should be seen as rebounds within a downtrend rather than the start of a new uptrend.

Altcoins: Over the past 24 hours, altcoins have staged a brief rebound amid panic conditions. XRP rose 1.95%, while SOL gained 3.48%. The Fear & Greed Index stands at 17, indicating the market remains in “extreme fear.”

Macro: On February 2, the S&P 500 rose 0.54% to 6,976.44; the Dow Jones Industrial Average gained 1.05% to 49,407.66; and the Nasdaq advanced 0.56% to 23,592.11. As of 03:30 AM (UTC) on February 3, spot gold is trading at USD 4,769 per ounce, up 2.35% over the past 24 hours.

Trending Tokens

ZIL Zilliqa (+59.32%, Circulating Market Cap: USD 132M)

According to Gate market data, ZIL is currently trading at USD 0.006260, up 59.32% over the past 24 hours. Zilliqa is a high-throughput public blockchain platform designed to scale performance to thousands of transactions per second, addressing the long-standing trade-off between transaction speed and scalability in blockchain systems. While significantly improving throughput, it also maintains a strong focus on security, seeking an optimal balance between the two. The recent surge in ZIL was primarily driven by a technical breakout. The price broke above a resistance level defined by recent highs, with the 7-day RSI at 64.41, indicating bullish momentum without yet entering overbought territory. Breakouts above key resistance levels often attract algorithmic and trend-following buyers, and holding above the psychological USD 0.005 level likely intensified investor FOMO.

C98 Coin98 (+37.03%, Circulating Market Cap: USD 25.07M)

According to Gate market data, C98 is currently priced at USD 0.02524, up 37.03% in the past 24 hours. Coin98 is a cross-chain liquidity protocol offering a full product suite, including Coin98 Wallet, Coin98 Exchange, and Coin98 Bridge. Coin98 Wallet is a non-custodial, multi-chain crypto wallet and gateway built as infrastructure for a multi-chain future, providing users with a one-stop platform to access the decentralized finance (DeFi) ecosystem. On February 2, a tweet from a well-known crypto trader noted that C98 has a maximum supply of 1 billion tokens and is currently trading at an 87.5% discount to its 2025 peak, describing the price as “compressed and ready to move.” Tokens with relatively low circulating supply, such as C98, tend to experience sharp volatility when retail interest surges. The tweet triggered FOMO, with trading volume jumping 256% above the 30-day average.

PURR Purr (+29.37%, Circulating Market Cap: USD 53.05M)

According to Gate market data, PURR is currently trading at USD 0.08841, up 28.37% over the past 24 hours. PURR is the first HIP-1 native token on the Hyperliquid L1 blockchain. It was launched without a token sale and has no predefined utility, serving primarily as a way for users to participate in the Hyperliquid ecosystem and benefit from its growth. PURR has broken above the 23.6% Fibonacci retracement level and remains above its 7-day simple moving average. The MACD histogram has turned positive, while the 7-day RSI stands at 68.31, suggesting momentum remains strong but not yet overbought. With spot trading volume up 54.62% to USD 3.26 million, traders may view the Fibonacci breakout as a buy signal. If the price can close above USD 0.0995 (the recent swing high), the next target could be the 38.2% Fibonacci retracement level.

Alpha Insights

JPMorgan: Walsh May Accommodate Rate Cuts in the Short Term, but Revert to a Hawkish Stance After the Midterms

On February 2, JPMorgan Chief Economist Michael Feroli wrote in a report that Walsh may be inclined to accommodate interest rate cuts in the short term—at least for this year. However, he cautioned that “over time, especially after the midterm elections, his stance is likely to adjust, potentially reverting to a more hawkish posture.” In addition, a former official who previously worked with Walsh noted that the “real Walsh” would eventually emerge. Notably, JPMorgan did not revise its rate-cut expectations following Walsh’s nomination. Feroli stated that even if Walsh takes office, the bank still expects the Federal Reserve to remain on hold for the rest of the year.

The sharp divergence in market views on Bitcoin’s price ultimately stems from differing expectations about future dollar liquidity conditions. A potential “dovish first, hawkish later” policy path under Walsh would only amplify this uncertainty, implying that market expectations need to be clearly segmented between the short and medium term. In the short run, the rate-cut narrative may dominate sentiment and provide support for risk assets; in the medium term, however, investors must remain alert to policy recalibration, as expectation gaps themselves are a key source of volatility.

Retail Bearish Sentiment Reaches Extreme Levels; a Technical Rebound May Follow

On February 2, crypto market research firm Santiment stated on social media that since January 28, Bitcoin has fallen 16%, accompanied by a surge in negative commentary across the crypto space. Social data show that current retail FUD (fear, uncertainty, and doubt) has reached a level more pessimistic than at any point since the sharp sell-off on November 21 last year. Historically, after such severe negative sentiment shocks, markets often experience a technical rebound. So far, the current rebound has encouragingly followed a pattern similar to those seen after the previous two major FUD events.

While the high volatility of the crypto market amplifies the impact of sentiment, rational investors should avoid relying solely on sentiment indicators for decision-making. A more effective approach is to integrate on-chain data, macro trends, and technical analysis—maintaining contrarian thinking during periods of extreme sentiment, while acting decisively once a trend reversal is confirmed. History may not repeat itself, but it often rhymes, and Santiment’s data once again reinforce the classic market principle that bottoms are formed in despair and rallies unfold amid hesitation.

Cboe Considers Relaunching Binary Options to Compete Directly with Prediction Markets

According to a Wall Street Journal report on Monday, global derivatives exchange Cboe Global Markets is evaluating the relaunch of binary options trading for retail investors, aiming to compete directly with the rapidly expanding prediction market sector. The report notes that the proposed contracts would operate as fixed-payoff derivatives: at expiration, they either pay a predetermined amount or expire worthless—a payoff structure closely resembling the “yes/no” contracts widely used on prediction platforms today.

It is worth noting that Cboe previously introduced binary options linked to major financial indices as early as 2008, but the products failed to gain traction in a market then dominated by institutional professionals and were eventually delisted. This time, Cboe emphasized that it will place a strong focus on regulatory compliance and product design as part of its relaunch strategy.

Cboe’s move highlights how prediction market products are increasingly influencing traditional finance from the outside in. Over the past two years, platforms such as Polymarket and Kalshi have seen explosive growth around macro events, elections, interest rate decisions, and index outcomes—demonstrating genuine retail demand for trading instruments that feature low entry barriers, fixed odds, and outcome-driven payoffs. Compared with the complexity of option Greeks and margin mechanisms in traditional options, binary options and prediction contracts function more like financialized tools for expressing information and viewpoints. If Cboe can successfully combine the intuitive user experience of prediction markets with the clearing, risk management, and liquidity advantages of a regulated exchange, it could reshape the product paradigm for retail derivatives trading. This also suggests that prediction markets are no longer fringe experiments confined to crypto or alternative finance, but a force compelling TradFi to rethink whether users truly want complex models—or simply clear, outcome-based results.


References

• Gate, https://www.gate.com/trade/BTC_USDT
• Farside Investors, https://farside.co.uk/btc/
• Gate, https://www.gate.com/trade/ETH_USDT
• TheBlock, https://www.theblock.co/post/388008/cboe-targets-prediction-market-all-or-nothing-options-revival-wsj?utm_source=twitter&utm_medium=social
• X, https://x.com/santimentfeed/status/2018338084291477745

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Disclaimer
Investing in cryptocurrency markets involves high risk. Users are advised to conduct their own research and fully understand the nature of the assets and products before making any investment decisions. Gate is not responsible for any losses or damages arising from such decisions.