Market Analysis
Cryptocurrencies continued to trend lower as recession fears weighed on risk assets ahead of a key jobs report on Friday. Bitcoin (BTC) fell more than 4% at one point on Thursday before rebounding to $56,500, down 2.9% over the past 24 hours.
BTC daily line fell below the key support of 57,500, and the closing price hit a new low since the rebound in early August. At the same time, the moving average group began to move downward across the board.
There is nothing to do in the short term. The feeling given by this market is that it is falling most of the time, but before it falls much, it suddenly pulls back with a positive green candle or a long lower shadow, which makes short-term traders always feel that there are opportunities to long, but they keep suffering losses.
Bitcoin has been fluctuating sideways from 73,000 to 55,000 in March for six months
Currently, it is maintaining a range of 64,300 and 55,000 between Fibonacci 0.618 and 0.236, and 55,000 has strong support. An incredible eternal bull market. Negative factors cannot go down, and positive factors cannot come up. It is so volatile that people are anxious. According to the data, the bull market should start in October, and high-quality leading coins will start to explode first.
Japan cuts interest rates, the financial crisis affects the global financial markets, mining is legalized in Russia, new openings are made for ETFs in Europe and the United States, Germany clears its positions, Mentougou has completed its liquidation, the Federal Reserve cuts interest rates in September, and after three years of waiting, the highlight moment is about to come.
September rate cut: soft landing vs hard landing
Unlike BTC's weak performance in August, although it also experienced violent fluctuations, the US stock market still showed amazing resilience during the same period. The Nasdaq recorded a monthly increase of 0.65%, while the Dow Jones Industrial Average hit a record high. During this period, there was a lot of discussion about whether to raise interest rates by 25 or 50 basis points in September, but the real focus of traders was actually the core issue of "whether the US economy will have a soft landing or a hard landing."
According to the current trend of US stocks, the market as a whole tends to believe that the US economy will achieve a soft landing , so it has not priced the US stock market downwards under the expectation of a hard landing. Based on the assumption of a soft landing, some funds chose to withdraw from the "Big Seven" that had previously risen sharply (most of which underperformed the Nasdaq this month) and entered other blue-chip stocks with smaller gains, pushing the Dow Jones Index to a record high.
According to CME's "Fed Watch" , the probability of a 25 basis point rate cut in September is 59.0%, the probability of a 50 basis point rate cut is 41.0% , the probability of a cumulative 50 basis point rate cut by the Federal Reserve by November is 34.2%, the probability of a cumulative 75 basis point rate cut is 48.6%, and the probability of a cumulative 100 basis point rate cut is 17.3%.
If the 25 basis point rate cut in September is finalized, and there are no major economic and employment data indicating that the economy does not meet the characteristics of a "soft landing", the US stock market will run steadily. If the Big Seven recovers upward, the BTC ETF will most likely resume positive inflows, pushing BTC upward and hitting the psychological barrier of $70,000 again or even challenging new highs. If major economic and employment data show that the economy does not meet the characteristics of a "soft landing", the US stock market will most likely be corrected downward, especially the Big Seven, and the corresponding BTC ETF channel funds will most likely not be optimistic. For example, BTC may go down and challenge the lower edge of the "new high repair period" of $54,000 again.
The current market of the crypto
The trading volume shows that everyone is lying flat, and the cottage industry has also fallen to the freezing point. What will happen next depends on the interest rate cut in September and how the US stock market reacts. After all, it is still worrying that it is at a high level.
The theme of the market this week is that the main force will determine the trend of the US stock market in the next stage based on the non-agricultural data.
The non-farm payrolls data is one of the five major financial report data of the US stock market. Every time it is released, it will bring great fluctuations to the market.
Because the market expects the Fed to decide to cut interest rates in September, employment data will be the focus of market attention. There is no impact of any financial report data this week, so one dimension of variables is reduced.
Therefore, the best trading strategy recently is to keep a short position and wait and see!
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