Before the Fed’s decision, the risk market was sluggish, and the U.S. stock market briefly sucked blood from the crypto market. Can Bitcoin hold its support?
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As of the time of writing, Bitcoin is quoted at around 61,000. After hitting a high this morning, Bitcoin continued to fall and at one point fell below the key support level of around 61,200.
And because of speculation about whether Powell's speech will be hawkish after the Federal Reserve's interest rate decision tomorrow, the U.S. stock market has once again escaped the positive earnings report and fell. Currently, the U.S. stock market cannot bring positive emotional effects to the crypto market and has brought short-term capital drain to the crypto market. Can Bitcoin hold the key support and then rebound?
Bitcoin disk analysis:
I don't want to use the support line anymore. Friends who have been paying attention should have found that the 61,200 gold support has continued from last week to now, especially at present, it is indeed supported, but the sad thing is that the support is no different from paper in the decline. Although there is a rebound, it is also a slow rebound after effectively breaking through. Its support strength, rebound strength and speed are all lower than my personal expectations, so the effectiveness of this support is also relatively low.
I didn't want to talk about the support below, so as not to scare everyone, but from a technical point of view, the only effective support below is the weekly support around 56,000. Of course, although this support is far away from the current price, it may not be directly reached in the short term. In the absence of major negative news, there is no need to worry about the so-called short-term waterfall. The 60,000 integer mark support below should stimulate some buying orders, and it should consolidate.
The upper rebound resistance has moved downward, and the monthly resistance is parallel to the daily resistance, currently around 64,500, which brings greater pressure on the subsequent short-term price breakthrough and rebound of Bitcoin.
The only good news on the technical side at the moment is that the RSI relative strength index has fallen below 30, which theoretically triggers an oversold rebound sentiment. However, this is only a technical theory. Whether it can rebound and whether the strength of the rebound is favorable still depends on market sentiment.
In the short term, everyone should pay attention to the risk of support breaking. We will immediately look at changes in market data and funds.
Let the data speak: Today’s summary, the decline has begun to increase, when will it be the bottom!
In Bitcoin's downward trend today, the decline of altcoins led by Ethereum was the most obvious, causing Bitcoin's share of the market to increase to 51% and market risk sentiment to decrease.
In terms of trading volume, whether it is Bitcoin, Ethereum or altcoins, they have basically started to increase in volume, in line with the downward trend. The large-volume decline represents the active short-selling force, and at the same time, some bottom-fishing forces are activated. The mainstream stablecoin transactions have also increased significantly, and funds have begun to become active.
In terms of funds, the retained funds on the market decreased by 200 million, and the net outflow off the market was 58 million. Among them, Asian funds continued to flow in, but the frequency of fund inflows and outflows increased, and Asian funds also had emotional instability.
Funds continued to flow out of the United States. Looking at the timeline, it was obvious that the outflow began before the U.S. stock market opened, and it was not until after the U.S. stock market closed that a small amount of funds flowed back in the short term and then flowed out again. The overall fund sentiment was biased.
Yesterday we said that we need to determine whether the current impact of the U.S. stock market on the crypto market is driven by positive sentiment or negative short-term capital drain. The crypto market has been drained by U.S. stocks for two consecutive days, so in the short term it is a negative effect.
The large-volume decline indicates that the bearish sentiment is slowly being released, but we still need to observe when the decline will bottom out, even if it is a short-term bottom.
Macroeconomics and news:
Looking at the performance of the US stock market today, I also mentioned it before the daily update in the afternoon. Basically, the positive effect brought by the US stock earnings report has basically weakened. And recently we can clearly see that under the premise of the disadvantageous economic environment, the risk market cares more about the trend of economic regulation. At present, the risk market expects Powell to continue to speak hawkishly after the interest rate decision tomorrow Wednesday, and continue to maintain a high interest rate. The old tune of interest rate cuts has also been greatly postponed to the end of the year. The frequency of interest rate cuts has also been greatly reduced.
Here is a point of view. In theory, any economy must rely on issuing bonds and coins to carry out an internal cycle, that is, issuing bonds, and then issuing coins to buy its own debts, and then circulate in this way to create economic and financial bubbles. The inflation generated by the bubble will be taken over and digested by society. For the United States, the big bubble it wants to create is for the world to bear. Therefore, it is necessary to continue to maintain the strength of the US dollar and continue to maintain high-interest US bonds.
In the U.S. defense mechanism this time, the U.S. must judge whether the global economy can take on the risks of the United States before it dares to cut interest rates or relax its tone. Otherwise, any optimistic market expectations will magnify the U.S.'s own economic risks and increase the probability of a U.S. economic collapse. This is something the United States dares not and does not want to do. The various factors are quite complicated, so I won't go into details here.
Overall, the functionality of the Federal Reserve is quite obvious. The United States reduces its own economic risks and absorbs global resources by creating bubbles, and the Federal Reserve is responsible for reducing the negative inflation caused by bubbles.
The performance of the US stock market today is basically predictable, and the situation of several companies that released their financial reports is also very clear. It is very difficult to achieve an independent rise against the trend, let alone lead the US stock market to rebound again. And if Powell continues to make hawkish remarks tomorrow as the market expects, the market will only continue to decline. On the contrary, if the remarks slow down, the first trading day of May may bring an emotional rebound to the US stock market.
However, the current optimism about the U.S. stock market cannot be extended to the crypto market. Unless there is a major macroeconomic positive, the current rebound in U.S. stock market sentiment does not seem to bring much positive sentiment to the crypto market. This is the current embarrassing situation of the crypto market.
As for the news, the biggest news in the crypto market right now is the final verdict of Mr. CZ. I don’t want to make too many comments here. I am optimistic that the sentence will be light or he may be released on bail and restricted from leaving the country, but this will not prevent CZ from continuing to contribute to the development of blockchain on the Internet. Waiting for a good result.
Market summary:
Currently, the crypto market can no longer get help from the short-term rise in sentiment in the U.S. stock market, and the overall macroeconomic pessimism is indeed gradually spreading, including the U.S. stock market. In the short term, the U.S. stock market is still sucking a small amount of blood from crypto U.S. funds, and the outflow of funds also represents the emotional trend of U.S. traders.
Of course, in the absence of major negative factors and black swans, both the U.S. stock market and the crypto market will experience a volatile correction due to low sentiment, and a short-term plunge will not be so easy to see, so everyone should look at the current environment rationally and not be too pessimistic.
In terms of contracts, it is not wise for bulls to do so at present. Shorting at high levels can generate certain profits at reasonable points, but attention must be paid to the breakthrough of key resistance levels. Once a breakthrough is made, sentiment will reverse in the short term, so pay attention to risk control.
In the spot market, if you are trapped in the short term, you can try to set a short position to cover your position and receive a pin at a lower position. Once the market falls and a pin occurs, you can effectively neutralize the cost price after receiving the pin, and then lower the cost. It is up to you to choose whether to leave or stay. However, the premise is that the currency you are anchoring is a mainstream altcoin, not a niche altcoin. The decline of a niche altcoin is often not a pin, but a direct drop, so you must distinguish it well.
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Finally, thank you all for your continued attention to Uncle Cat and thank you for your continued support.
