At present, the market is still immersed in the optimism after Powell’s dovish speech, and the focus will be on whether there will be some corrections in the US market tonight.
Because if you think about it carefully, you will find that Powell did not reveal more information, except for implementing the consensus expectation of a rate cut, and it is still unclear whether the rate cut will be 25% or 50%.
However, it is clear that inflation will no longer be the focus in the future, and the job market will be the key to influencing policy.
BTC has broken through the rebound pressure level of -62,000, which is a strong performance. Whether you bought in the pullback last week or bought more when it just broke through, you can continue to hold it patiently with a stop loss.
If the price falls back but does not break the rising trend line, it will continue to rebound, but it needs to stand firmly above 67,000 to confirm that the trend has reversed.
The economic situation will directly affect the return of recession trading. But before that happens, it is not bad to take advantage of the rebound.
The current key market position is around 6.35w, which is the moving average support position of the 5-day line, 120-day line, and 200-day line resonance, and is also a support line at the 4h level in the figure below.
Therefore, this price is very critical. If it can continue to trade sideways for the next two days, then the breakthrough here is valid and the bullish trend continues. If it falls below, the gains on Friday night are likely to be swallowed up again, and the market will go back to where it came from.
The recent violent rebound of the altcoin shocked many people. In just a few days, it directly pulled back all the losses of the past few months, exceeding the record highs in March and April. This is because the bull market after the halving is so fierce and fast that retail investors can’t wait to react. When they react, they can only chase the rise.
Why can it pull so much?
1. Both project owners and exchanges need to make money.
2. After several months of liquidation, all the chips have been cut, and the market is extremely clean. All the chips are concentrated in the hands of the project party. With very little funds, cooperating with a big dealer named An, the so-called favorable conditions for opening contracts, and the pursuit of rising prices by retail investors, the prices have been pulled up faster and higher.
At present, the overall cost-effectiveness of the copycat is still very high. Although it has experienced a small rebound, it is still mainly for testing the market to test how many retail investors and funds are in the market. Those that have not been washed out will be pulled up very slowly. Continue to wash. If the price is pulled high, the chips will be distributed to retail investors and continue to be smashed to wash. Repeat this until the beginning of the fourth quarter, and then slowly copy to form a large bottom and complete the pull-up in a very short time.
From a market perspective, many retail investors have not yet entered the market and have not yet reacted. Now the market is full of previous funds fighting each other. By the time the real retail investors outside the market come in, the FOMO is already very high.
Many people say that it is very difficult to play in the copycat market now. I agree with this very much. There are many aspects and points involved, but one thing remains unchanged, that is, in the bull market after the halving, each sector will pull up once, but the extent of the pull will be different. As long as you are in the spot market, the only one who will cut you will be the one. As long as you don’t cut yourself, you will still have a chance.
There is still a chance!
Will the next four months be the golden period for the market?
As mentioned before, interest rate cuts will not immediately bring about abundant liquidity. Firstly, interest rate cuts are a gradual process that gradually lowers interest rates. Secondly, policy transmission takes time.
However, the interest rate cut directly represents a policy shift. The market will expect that liquidity will become more and more abundant in the future. "Expectations" are very precious, and the market will continue to be in a stage of strengthened expectations in the next few months.
The second point is: the recession has not really arrived yet, the unemployment rate, non-farm payrolls, etc. are still within controllable range, and there is no substantial evidence of a recession. Judging from Powell’s speech, the Federal Reserve is also guiding the market to think so.
The third focus is the US election and Trump’s coming to power.
In summary: In the coming months, expectations for monetary easing will continue to strengthen, the recession has not yet come, and finally there is the Trump narrative.
Since the beginning of this month, the trading logic of the entire financial market has changed significantly, especially after Powell's speech, the market has clarified its direction.
Gold rose to a record high; the U.S. dollar index fell; the Russell 2000's gains accelerated; and crypto altcoins rose sharply. Cathie Wood's Arkk is expected to rise sharply soon as well.
Why is this so? Because the logic behind the rise of these assets is based on "the liquidity that will be flooding in the future". In one sentence, it can be explained that when the Fed's policy changes, global risk assets will rise.
If BTC tests 7w again, I think there is a very high probability that it will rush up, after all, the environment has changed significantly.
In a bull market, you must seize the big opportunities to hold a large position and give up profiteering, which is no longer cost-effective. Give up pledging and stop wasting time and chips.
Whether it is the Bitcoin ecosystem or the Inscription ecosystem, don’t leave!
Take every day that follows seriously. The bull market is short and the bear market is long, and the bull market will be over in the blink of an eye.
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