Market sentiment has been negative recently, but I think the worst is not far away.
1. The main impact of the sharp drop in BTC and the US stock market is the sudden short-term conflict between Iran and Israel. As for the old friend who said that BTC should not be the same as gold during the war, and that the price of BTC to show its value.
In the short term, a sudden outbreak of war will inevitably trigger an inflation panic, and the inflation panic will inevitably make short-term expectations of loose monetary policy and loose economic expectations impossible . To put it more bluntly, the probability of interest rate cuts in the beacon country will be greatly reduced.
Therefore, in the short term, when incremental funds are blocked, existing funds have been used up, and existing funds are also in panic, it is impossible for the BTC to continue to rise to new highs.
2. There are less than 4 days until BTC is halved. Based on the historical experience, after Bitcoin is halved and the whole wash is completed, it is the outbreak period of BTC cyclical bull market . The whole world's capital is watching this outbreak period. See the following figure for details:
3. But we also need to be prepared for black swans. This year is an election year. Geopolitical conflicts and international disputes under proxy wars are only increasing. The inflation rate trend line is unlikely to go down. If the US government tightens its immigration/refugee policy, it will bring additional inflationary pressure. Therefore, the black swan is not only not to cut interest rates but also to raise interest rates. The probability of this happening is not high at present, but there is a 5% chance of it happening. Once it happens, the breakout of US stocks and crypto will be terrifying.
Hong Kong ETFs
Bloomberg ETF analyst Eric Balchunas wrote that the Hong Kong spot Bitcoin ETF has been approved to exist, but has not yet been launched. There are rumors that it will be launched next week. It is expected that the Hong Kong spot Bitcoin ETF will not have a lot of flow, and the estimated capital inflow may be US$500 million for the following reasons:
1. The Hong Kong ETF market is very small, with only US$50 billion, and mainland users are still unable to purchase it, at least officially.
2. The three approved spot Bitcoin ETF issuers (Bosera, Huaxia, and Harvest) are relatively small in scale. No large institution like BlackRock has participated in them yet.
3. Lower liquidity/efficiency of the underlying ecosystem = these ETFs may see larger spreads and prem discounts.
4. Transaction fees may be 1-2%, which is higher than the US spot Bitcoin ETF
In my previous analysis, I mentioned that the expected performance of the Hong Kong ETF after its approval should have a very small positive impact on Bitcoin, but for Ethereum, it will have a greater positive effect . It is equivalent to filling a gap in the market and is likely to attract some off-market funds to participate in investment.
Market correction, you need to know these points
1. The market has been rising for several months, and the demand for a correction is particularly great.
2. There will be a big drop before and after the halving.
3. There will be many pullbacks in a bull market. To be precise, the rise during this period is the brewing stage of the bull market, but the passage of the BTC spot ETF has made this brewing a little more intense.
In terms of the market, we still maintain the view that Bitcoin is fluctuating in the high range of 60,000-7.40,000. The support below is around 60,000, and it is difficult to effectively break this support level at once. If the market effectively falls below 60,000, the ultimate support will be in the range of 50,000-5.30,000. For the market, we still maintain the judgment that the bull market is relaying, and we hold positions patiently. The larger the Bitcoin oscillation structure is, the smoother the rise will be in the future.
As for altcoins, Bitcoin’s market share reached a peak of 55.13% over the weekend, which is already at a relatively extreme level. If the market continues to adjust, I estimate that the extreme value of this data will be between 57% and 60%, which means that altcoins will start to rise or make up for the rise at this moment. With the market adjustment, altcoins are still in a position to open positions, so be patient.
Some time ago, readers often asked in their messages whether XXX could still be purchased?
This is the perfect time to answer questions like this.
If investors are still optimistic about these projects, but have been unable to buy them because they are too expensive, they may want to see if their prices have fallen low enough or within their psychological price range.
If so, and there is no problem with the project itself, isn't this the time for investors to enter the market?
Even if they are not, their prices are still very high. At least the market has given us the opportunity to re-examine these projects that we once favored and wait for the right time to enter the market.
From this point of view, investors have no reason to panic about such a decline.
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