80% of the market is in fluctuation. Except for the unilateral trend, it is not bullish here. The MA20 moving average is above the BTC daily line, and the 4-hour MA250 moving average pressure level is in sight. It will fall or consolidate first. The pressure level should even be guarded against the gate.
The only suggestions for spot trading are mid-term position control and inverted spread (sell when the market continues to rise, buy when the market continues to fall). A sharp drop is the best opportunity. The only thing left to do is short-term trading. The Fed's mid-month rate cut meeting is a major event that the world is paying attention to. There is a 75% probability that the rate will be cut by 25 basis points. The secondary markets around the world should be linked. We will see how liquidity reacts at that time.
Current U.S. macroeconomic outlook
1. The impact of the economic recession on Europe is that it will definitely enter a recession earlier than the United States
2. Recession or soft landing. If GDP growth remains strong in the next few months and it turns out that the probability of a soft landing is increasing, then the market will run ahead in the last quarter of this year, which is also in line with the bullish trend after October.
3. Based on the current GDP data, a recession will occur next year.
4. The rise in unemployment rate usually occurs during the period of falling inflation. The real rebound in the financial market occurs in the middle of the rise in unemployment rate. The best time to buy the dips is actually during the period of rising unemployment rate (which is now).
5. As a developed country, the US economy is heavily dependent on consumption. A decline in consumer spending will bring the US into recession, but the recovery will also be quick, so don’t treat recession as the end of the world.
6. The Fed mainly wants to achieve a soft landing for the economy, so the order of solving the problems is inflation, economic growth, and employment.
7. The current inflation problem will just fall back naturally. Once it is resolved, it will coincide with the pace of interest rate cuts. However, this time the rate cuts are slow. In fact, the first rate cut should have been made in July to be considered a preventive rate cut.
8. If the interest rate is expected to be cut by 100BP today, the information provided by the September dot plot will be very critical, which will determine the market trend in the last quarter.
Regarding the judgment of when this round will reach the bottom, there are the following signal references:
The current ups and downs are all emotional effects under poor liquidity. If the U.S. economy does not enter a recession in July, August, and September, and no black swan appears, there is a high probability that the market will continue to fluctuate widely in these three months until September, entering the pre-election stage.
Next is the election cycle, which is generally favorable for risky assets and is relatively bullish.
If an economic recession occurs, then the current price level is definitely not the bottom, and a larger gold pit will appear.
Economic recession can be observed through the unemployment rate. When the United States experiences an economic crisis or recession, the unemployment rate will be above 5.2% or 5.4%. Powell also said in some meetings that when the unemployment rate exceeds 4%, the Federal Reserve will consider whether to cut interest rates in advance.
Because from the Fed's perspective, their expectation for the unemployment rate in 2024 is 4.2-4.4. If it exceeds 4.4, it means that the economy has begun to get out of control and will gradually shift towards recession. When the unemployment rate gets higher and higher, the probability of triggering an economic recession becomes greater and greater. Although interest rate cuts may bring some promotion to the market, in a longer period of time, high unemployment rates may eventually evolve into an economic recession.
There is no absolute bottom, so find the bottom range that suits you and make fixed investments. If you are a long-term holder and are willing to buy the dips, you can split your positions at the set price. Every time the price drops by a certain amount, you can add a position that you can afford.
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