July 3 Bitcoin Market Analysis

In terms of macroeconomics, Fed Chairman Powell said that inflation may return to 2% by the end of next year or the year after. The Fed's policy is still restrictive and appropriate. Powell also mentioned that some service industry inflation is catch-up inflation, the labor market is cooling, and wage growth is still above the final equilibrium level, but is falling back to a more sustainable level. The service industry is generally more difficult to reduce inflation.

Powell emphasized that the balance of the labor market is moving in a better direction. When Powell talked about the issue of interest rate cuts in September, he insisted on his consistent view that the two-way risks of monetary policy, premature interest rate cuts may rekindle inflationary pressures, and if interest rate cuts are too late, the Fed may cause unnecessary damage to the economy.

At present, there are big players in the market who are betting on the Fed's interest rate cuts in July and September. Yes, you read that right, it is July and September. There is a view in the market that the current employment situation in the United States is poor and the risk of economic recession is extremely high. The Fed has given a very strong hawkish attitude in order to control expectations, but in fact, debt risks and recession risks will force the Fed to cut interest rates in advance. Powell's speech was quite ordinary and not very informative, but we should always pay attention to the trend of US recession risk and interest rate cut expectations, which will largely determine the trend of Bitcoin. The current weak trend of Bitcoin is likely related to the expectation of US recession.