The rebound of the Japanese yen has caused market pessimism. Can the US stock financial report continue the rise of the stock market? Will the US stock market attract short-term funds to the crypto market?
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As of the time of posting, Bitcoin is priced at around 62,800. Bitcoin started a new round of volatility and decline at 6 a.m., which directly led to the break of the 1-hour and 4-hour levels, and the daily trend is downward. Market data and funds are not optimistic.
The rebound of the yen over the weekend has led to market suspicion and pessimism that the Federal Reserve will continue to make hawkish remarks this week. Although the U.S. stock earnings report has kept individual stock prices rising, it still cannot save the overall downward trend of the U.S. stock market. Can the rise continue after the earnings report is released?
Currently, there is a small outflow of funds from the crypto market due to the opening of the U.S. stock market. Now we need to determine whether the U.S. stock market will trigger a short-term capital drain on the crypto market.
Bitcoin disk analysis:
As for the current Bitcoin market, with the volatile decline, the market is not optimistic. The short-term stabilization is only driven by emotions.
First, let's look at the short-term rebound resistance level, the monthly resistance level of 64,000 and the daily resistance level of 64,800. As the daily resistance level has been moving down since last week, it also proves that the daily trend has become a downward trend. The advantage of the downward movement of the resistance level is that it is conducive to shortening the rebound distance of short-term prices, but the disadvantage is also very obvious. As the resistance level moves down, once it coincides with the monthly resistance level, the resistance to short-term price rebound will be stronger at this stage. At present, 64,000-64,800 needs stronger strength in the rebound breakthrough.
As for the support below, it is not so optimistic. At present, the effective support below is only around 61,200 from the technical point of view in the short term. I have mentioned this support many times before. It is the support level of gold. At the same time, the support of the lower line of the three-day Bollinger band has been added. If this position is broken, the so-called integer support around 60,000 below is still relatively weak. There may be a short-term rebound in the sentiment of the integer level, but if it is really broken effectively, it will be a drop in the bucket.
A more pessimistic view is that the truly effective support below is around 55,000-56,000. In other words, once it falls below 60,000, there will still be a lot of room below.
Of course, the downward space I mentioned is cyclical. It does not mean that it will fall directly to this position in the short term. So when seeing this, many friends do not need to panic. We can just make adjustments at any time as the market declines in each stage.
At present, the only thing we can rely on for the rise of Bitcoin is the positive effects brought by the U.S. stock market. We hope that the rise of the U.S. stock market can bring positive optimism and help the price of Bitcoin rebound. Of course, if every rebound of Bitcoin cannot effectively break through and stand firm at the key resistance level, the bullish sentiment will gradually be weakened, thus forming a legitimate rebound and decline trend.
The RSI relative strength index has fallen to around 30 points, basically reaching the oversold rebound sentiment. In conjunction with the rise of U.S. stocks tonight, pay attention to Bitcoin's rebound sentiment and key resistance levels.
We will use data to speak later.
Speaking with data: Comparing last Friday's data with fund changes
The current market data has not changed much compared to last Friday, whether it is market value, transactions, or funds.
First of all, in terms of market capitalization, although Ethereum has not successfully driven the overall upward trend of the market, its performance based on the data alone is still temporarily strong, while the altcoins are in a weak position following the trend of Bitcoin. Ethereum has eaten up the market share of the altcoins and Bitcoin.
The trading volume has increased slightly, and the market liquidity is still insufficient. In the stage of sideways fluctuations, the lower liquidity represents the brewing market sentiment. By observing the weekend data, the trading volume slowly resumed growth on Monday.
In terms of funds, Monday is not optimistic at present. The on-site funds increased by 100 million, and the net inflow of off-site funds was 76 million US dollars. In terms of off-site funds, although there was a net inflow compared with last Friday, according to the fund data we observed over the weekend, there was actually an inflow of funds from Asia and the United States over the weekend, while according to the fund data on Monday, funds were flowing out slightly. Especially US funds, which returned to the state of fund outflow on the eve of the opening of the US stock market. Now we just hope that funds can flow back after the US stock market closes. If the funds do not flow back, the help that the US stock market currently brings to the crypto market will be weakened, and it will instead bring capital to the crypto market.
Because it is Monday, the data has not yet fully started. Tomorrow we will focus again on data changes, especially changes in funds. The U.S. stock market opened well tonight. The only thing we need to determine at present is whether the U.S. stock market has played a role in driving positive emotions in the crypto market, or formed a short-term capital drain.
Macroeconomics and news: (long article, involving important events this week)
The current macroeconomic focus is that the yen exchange rate rebounded over the weekend after hitting a historical low. The market began to speculate that the Japanese government intervened in the exchange rate, which led to the rise in the exchange rate. The Japanese Finance Minister refused to respond. The rise in the yen exchange rate led the market to expect that the Federal Reserve will use its speech this week to guide market sentiment towards inflationary pressure issues, thereby boosting the US dollar index, which in turn once again had a suppressive effect on the risk market.
In fact, it is not difficult to understand the rebound of the yen exchange rate. The possibility of government intervention is not high. The depreciation of the exchange rate may lead to a short-term rise in inflation. However, it is a bit premature to talk about inflationary pressure in the Japanese economy since the end of deflation. Inflation can be suppressed defensively, but I do not think that the currency will be intervened directly and proactively because of inflation. And the depreciation of the yen exchange rate has both advantages and disadvantages.
I personally believe that the rebound of the yen is due to the short-term oversold yen, which has led to a short-term rebound caused by a large amount of foreign capital purchasing yen assets, or it is to find an excuse for the United States to further boost the dollar.
In terms of macro data this week, the market currently believes that the Fed officials will continue to be hawkish due to inflationary pressure, thereby boosting the dollar to maintain its strong position, based on the speech after the Fed’s interest rate decision in the early hours of Thursday morning.
As for the non-farm data on Wednesday and Friday, especially the large non-farm data on Friday, according to current market expectations and previous values, it is basically expected to show relatively weakened data. Previous US employment data has always been overheated and strong, and the rapid cooling of US GDP last week, coupled with inflationary pressure, is under control. Now the expectation of a soft landing is just one employment data away. If the employment data shows that the job market is gradually cooling down but still maintains positive growth, this will basically be in line with expectations of a soft landing of the US economy.
The US stock market opened higher, but under the influence of the Japanese yen exchange rate, the performance of the US stock market was actually mixed. Only Tesla, Apple and Google rose in the technology sector. The former rose by 10% in a single day due to its return to the Chinese market share, while the latter Apple and Google will announce their quarterly financial reports on Tuesday and Thursday this week, which is considered a positive news that has not yet been realized, so they are currently maintaining a small increase. In addition, other technology giants are currently maintaining a downward trend.
From this point, we can clearly see that although the financial report has brought positive sentiment, how long can the advantage of the financial report drive the stock price? As the market changes over time, investors have overvalued and expected too much of technology companies. Last week, Meta's stock price fell despite the good financial report due to overly high expectations. The financial report is more like a magic mirror, showing the true face of the company to investors. At present, the US stock market is driven up only by sporadic technology stocks and stocks with good profits, but under the tense economic environment, it is good that it did not close down today.
In the early hours of Monday morning, at 5:00 pm Eastern Time, after the U.S. stock market closed, MSTR MicroStrategy will release its financial report, but the current stock price trend is not optimistic. MicroStrategy's financial report results must be good, after all, the profits from holding a large amount of Bitcoin are an important profit structure for maintaining the company. However, a good current financial report does not necessarily mean a good future. Whether the market will have higher expectations and valuations for MicroStrategy's stock price will put MicroStrategy under greater pressure to release its financial report.
The current rise of the U.S. stock market has once again led to a small rebound in Bitcoin, but the key position has not yet been broken through and stabilized. In addition, we must pay attention to the movement of U.S. funds in the crypto market after the U.S. stock market closes. If the U.S. stock market performs well, will it help the crypto market emotionally or cause a short-term capital drain?
Market summary:
The overall state of the market, whether from a technical perspective or changes in market data, we have to admit that it is not optimistic. The rebound is always weak, the market lacks new narratives, and the Ethereum ETF hype has only reduced the decline of Ethereum, while the driving sentiment of the US stock market is not obvious, and it is still necessary to determine whether the US stock market will cause short-term capital absorption in the crypto market. Moreover, the current rise of the US stock market is not very optimistic.
Overall, the trend of the crypto market in the short term is worrying, but this is not the arrival of a bear market, but a phased correction. We don't need to be too FOMO about the market. But don't panic too much during the decline. Many people like to look at 80,000 or 100,000 when it rises, and 40,000 or 30,000 when it falls. The emotions are a bit extreme.
And after the Bitcoin ETF is passed, the basic structure of Bitcoin will inevitably change. With the addition of the ETF, whether it is the change in the investment group or the change in the concept of holding currency, there will be very big changes. This change will lead to extreme disappointment in expectations for many people.
Treat the periodic decline and correction rationally, especially for users who hold spot positions. Before the halving, we reminded you to control your positions appropriately. Now you just need to wait for the right opportunity to cover your positions. Especially for spot trading, don't pursue the so-called selling at the highest point and buying at the lowest point. Extend the holding period and exchange space for profits.
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Finally, thank you all for your continued attention to Uncle Cat and thank you for your continued support.
