This article was published on the official account at 22:30 last night and is now synchronized to Binance Square!
The Fear and Greed Index resets the market, it is now at 43, in fear mode. This is exactly what we want to see, greed dissipates and fear rises. Then we buy! Sentiment seems to be changing. The market looks safer compared to yesterday. This is thanks to the speech of Fed Chairman Powell.
This morning's FOMC meeting was probably the most important in recent history, as it was the first meeting after we got very bad economic data (PPI, CPI). We had already predicted that interest rates would probably remain unchanged (as they did), so everything depended on the overall tilt of Powell's speech (dovish/hawkish).
Powell seemed to approach everything in a positive way. He came off as very dovish (from a certain perspective). Here is a summary of his speech. Pay special attention to the combination of points 1 and 3:
1. The next policy move is unlikely to be an interest rate hike;
2. Powell does not believe that what we are seeing is stagflation;
3. The 2024 election is not part of the Fed’s thinking;
4. An unexpected weakening of the labor market could spur rate cuts;
5. The Federal Reserve is “unsatisfied” with the 3% inflation rate;
6. It is not clear when interest rate cuts will begin;
The Fed is currently expected to maintain its current stance through September, with the first rate cut expected in November, according to the CME FedWatch tool.
Fed Chairman Powell’s speeches can often be misleading for traders, and that was the case yesterday. During his speech, almost all risk assets rose by about 3.5% (Bitcoin was rejected at the $59,000 level). However, the S&P 500 and Nasdaq ended up closing lower. The upward momentum was largely lost after Powell’s speech. But overall, I feel like the market is touching a bottom.
Open interest (OI) is down 40% from highs, meaning many contract orders have been closed (both long and short), so the market is cooling down.
Yesterday’s Bitcoin spot ETF saw outflows of approximately $564 million, a peak that was previously marked by $1 billion inflows a day. Interestingly, many Bitcoin spot ETF buyers are now losing money!
Coinbase is scheduled to release its first quarter (Q1) 2024 financial results after the U.S. stock market closes on May 2, 2024. Coinbase is expected to report a 71% year-over-year revenue increase to $1.3 billion in the first quarter, up from $772 million a year ago. This would be the highest quarterly revenue growth since the fourth quarter of 2021, and its trading revenue could nearly double from a year ago, which would mark the second consecutive quarter of profitability and a continued turnaround from losses a year ago, which could be good for the crypto market.
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Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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