The recent market trend is in line with the expectations of the previous article. Since the beginning of June, I first issued a risk warning and then clearly expressed my bearish view. BTC also fell below the 120-day line as expected last week.
Back to the market, it is obviously in a favorable position for short sellers recently. I also saw a particularly bad signal. In the process of price falling all the way, under the situation of continuous liquidation, the contract open interest did not decrease, but increased slightly.
The following figure shows the BTC contract open interest of CME. It can be seen that the open interest slightly decreased during the price drop from 66.7w to 63w. Considering the reduced open interest due to liquidation, in fact, both long and short positions were increasing during the decline.
According to experience, there must be a corresponding leverage cleanup before the real market takes off , as well as a process of reaccumulating chips at the bottom. At present, there should be another big wave in the future , the purpose of which is to reduce the current contract position and blow up one end. Combining the position situation, K-line trend and technical indicators, in the absence of sudden positive news, I personally think that the probability of longs suffering is greater.
Keep an eye on the downside support of $60,000-62,000. We expect the daily line to be supported briefly in this range. As for whether the market will rebound from $60,000 or continue to fall, I still need to wait until the trend actually falls to $60,000-62,000 and make a judgment based on the real-time closing situation.
In short, I don’t think there will be a new upward trend in the near future , but as shown in the figure below, due to the continuous bottom divergence + wedge at the 4h level, if the upper edge of the wedge is broken, there may be a short-term rebound, but it is just a rebound.
Several key points of observation that may bring volatility to the market this week are:
1. US May core personal consumption expenditures PCE report
The U.S. Department of Commerce will release the latest personal consumption expenditures (PCE) price index on Friday (28th), which is one of the important indicators used by the Federal Reserve to measure inflation changes. Analysts estimate that the annual growth rate of the U.S. core PCE in May is expected to slow to 2.6%.
Most economists expect U.S. inflation to have turned a corner after rising in the first quarter, as both the consumer price index (CPI) and the producer price index (PPI) slowed in May, mainly due to lower gasoline and other commodity prices, which partially offset the impact of rising home rental costs.
2. Fed officials talk
Several Fed officials are scheduled to speak this week, including Lisa Cook and Michelle Bowman, two of the Fed's top economists, and Mary Daly, president of the San Francisco Fed, who has a vote on the Federal Open Market Committee (FOMC) this year.
3. The first debate of the US presidential election
In addition, the first debate of the 2024 US presidential election will be held at 9 am on the 28th. It will be a battle between the current President Biden and the former President Trump. If the two discuss the issue of cryptocurrency on stage, it may bring potential fluctuations to the market.
This week has a huge impact on the market trend. Next week there will be key CPI data. Let's wait and buy the dips. You can make good use of this time to learn more knowledge, and then study and think more about how the market will develop and which tracks will be the wealth code in the future. When the overall market is not good, it is a waste of time to watch more plates.
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