1. When to BUY?
1.1 Where to BUY?
$BTC has bounced from $49,640, a critical support level on the higher time frame (HTF).
- Ideal Accumulation Zone: Breakout at $54,500 is a key place to accumulate.
- Expected Range: $54,500 to $60,700 in the coming weeks.
- Expansion Zone: Bitcoin should see significant movement after breaking $60,700.
1.2 Liquidity Analysis
- Current Situation: $BTC has absorbed liquidity from the lows at $48,000.
- Future Expectation: Anticipate a retest of the $60,000 level rather than revisiting $48,000.
2. Causes of this DUMP
2.1 U.S. Economic Concerns
- Impact: Weak U.S. jobs report impacting global markets.
- Potential Fed Action: A weak U.S. economy might prompt the Fed to cut interest rates, affecting market sentiment.
2.2 Japanese Economic Shift and the Yen Carry Trade Unwind
- Bank of Japan Decision: Recent interest rate hike by 0.25%.
- Impact: Significantly affects the yen carry trade strategy, influencing global market dynamics.
2.3 $ETH Sell-Off Fears
- Key Moves: Jump Crypto moved over 120,000 staked $ETH tokens to various exchanges.
- Market Impact: Estimated $410M worth of $ETH unstaked, with about $191M already deposited on exchanges.
3. Crypto and Stocks Liquidations
3.1 Crypto Liquidations
- Impact: Over $1B wiped out in crypto liquidations due to the global market downturn.
- Market Crash: Aug. 5 saw a significant crash in the crypto market, particularly triggered by Japan’s stock market fall.
- Trader Impact: Nearly 300,000 crypto traders liquidated from their leveraged positions.
3.2 Bitcoin Specifics
- Price Drop: BTC crashed from around $65,000 to $50,000.
- Long Positions: Traders holding long positions lost over $315 million in under 24 hours.
- Short Positions: Shorters lost $62.23 million in the process, specifically in $BTC trading positions.
3.3 Central Bank Intervention
- Expectation: Central Banks might step in to stabilize the market.
- U.S. Strategy: Possible increase in dollar printing to save the stock market.
- Inflation Risk: Increased dollar supply could lead to inflation, impacting real estate prices.
4. Japan Economy
4.1 Stock Market Impact
- Nikkei 225: Japan’s stock index plunges 12.4%.
- Borrowing Strategy: Investors borrow from low-interest, weak-currency countries like Japan and invest in higher-return markets.
4.2 Volatility Surge
- Perfect Storm: Combined macro and market shocks hit when risk assets were already overbought.
- Bank of Japan: Plans to raise the policy interest rate, influencing market dynamics further.
5. VIX (Volatility Index)
- Implied Volatility: VIX represents the implied volatility of the S&P 500 over the next 30 days.
- Recent Rally: VIX hit its highest level since the pandemic on Monday, exacerbated by the Nikkei’s 12% plunge.
- Market Reaction: Increased volatility indicates heightened market uncertainty and potential for further fluctuations.
Conclusion:
Understanding these factors can help you navigate the current market landscape, identifying strategic entry points for and anticipating further market movements. Stay informed, exercise caution, and capitalize on opportunities as they arise.
