The CPI data came out last night. The previous value was 2.9%, the expected value was 2.6%, and the actual value was 2.5%, which was far lower than expected. Logically speaking, this is a major positive news!
The market generally expects the Fed to cut interest rates by 25 basis points on September 18. It is worth noting that a few days ago, the betting website predicted that the probability of a 50 basis point rate cut was 24%, but after the release of CPI data last night, this probability quickly dropped to only 9%, while the probability of a 25 basis point rate cut soared to 90%!
Biden and Harris reached a partial compromise on energy issues. Surprisingly, Trump also strongly supported the development of electric vehicles, while Harris made a major change in his stance on the traditional oil industry and began to support shale oil development. The consensus of both sides is to do everything possible to lower US oil prices.
No matter which side comes to power, it is not good news for oil prices, but for the cryptocurrency world, this may be a positive signal!
After the CPI data was released yesterday, Bitcoin once dropped to $55,545, and then quickly reversed in a V-shape, instantly erasing the decline. In the early trading today, the price has risen to around $58,500.
The current market is still dominated by fluctuations. Before it breaks through $62,000, it is considered a rebound. The short-term pressure level is $59,200, the extreme pressure level can be seen at $60,500, and the bottom support is around $54,800.
The CPI data caused a violent market shock. Yesterday's market was a "sin"! After the release of the US CPI data, the US stock market plummeted instantly, leading the broader market to follow. However, with the V-shaped reversal of the US stock market, the broader market also rebounded, which really hurt investors' wallets.
The sharp rise and fall after the CPI landed made the market sentiment like a roller coaster. When it fell, some people shouted to look at 40,000 or even 30,000; when it rose, some people imagined that Bitcoin would reach 70,000 or 80,000. However, transactions without cyclical support are like climbing a mountain with a thin rope, and there is a risk of falling and being crushed to pieces (liquidation) at any time.
Next, the Federal Reserve’s mid-month interest rate cut meeting will become the global focus. Global secondary markets will be closely linked, and market liquidity will become the key.
At present, all key economic data have been released. Inflation has obviously cooled down, but the risk of recession has increased, forcing the Federal Reserve to cut interest rates. In addition, there may be two interest rate cuts this year!
In the financial trading market, huge uncertainties and potential risks are often referred to as "financial games." The market is full of stories and expectations. When there is a lack of hype, the driving force of price fluctuations will also fade.
So, in this environment, how will Bitcoin perform? When will the next wave of major upswings come? This article will start from the recent trend of Bitcoin, deeply analyze the risks and opportunities in the market, and give you insight into the investment logic behind it!
After the V-shaped reversal, where is the next key point of Bitcoin?
CPI data reveals the truth behind Bitcoin's weakness!
After the release of the US CPI data yesterday, Bitcoin staged a "fall first and then rise" drama. Although the data showed that the CPI rose by 2.5%, which was lower than expected, it should be a positive for the market, but Bitcoin failed to rebound as strongly as expected.
What is the reason behind this? What is the mystery behind the weak prices?
After the release of the CPI data, Bitcoin once dropped to $55,500, and then quickly rebounded. However, this trend revealed a signal: Bitcoin's sensitivity to external economic data is gradually weakening.
Behind this is an iron law of the market: when there are no new stories to tell, or the climax of the story has passed, the hype will also subside. Without the promotion of strong themes, market volatility will drop significantly, and the market will begin to appear weak and powerless.
Price Analysis: Divergence and Key Resistance Levels
Judging from the daily and hourly trends of Bitcoin, the price has been blocked three times at the high of $58,300. Yesterday's two attacks failed, and today was the third attempt to break through this key resistance level.
If the subsequent fourth offensive fails again, Bitcoin may face the risk of further correction technically.
What is even more noteworthy is that the MACD (moving average convergence divergence) has issued an obvious "bearish divergence" signal - that is, the price has reached a new high, but the MACD momentum column has gradually shrunk, suggesting that the bulls are gradually weakening and the bears may take over the market. Although the divergence does not mean that the price will fall immediately, it greatly increases the possibility of a market turn.
During the previous rise of Bitcoin, the momentum gradually increased; but with the second surge, the momentum weakened significantly, especially in the third and fourth shocks, the signs of momentum exhaustion became more and more obvious, and the market may usher in a wave of adjustments.
According to technical analysis, if Bitcoin fails to effectively break through the key resistance level of $58,300, it is very likely to pull back and fall to the lower track of the channel to seek new support points. This decline may become a key turning point for the next trend of the market.
Uncertainty and awe in trading
In the trading market, there is one eternal principle: uncertainty. This is the core of what we call "financial game".
Although many people try to find certain opportunities or "risk-free arbitrage" in the market, this pursuit is often the root cause of investment failure. Successful investors must have awe of the market and respect for transactions.
Currently, Bitcoin’s technical pattern fails to give a clear upward or downward signal. Therefore, we need to be more cautious at the key resistance level of $58,000.
If the price fails to effectively break through $58,300, Bitcoin may face the risk of a pullback. The exhaustion of bullish momentum on the two-hour level further highlights the importance of this key price level.
The key to future trends: technical patterns and time cycles
At the weekly level, the price of Bitcoin is still suppressed by the 30-week moving average, which is currently at $58,800, close to the round number of $60,000.
If Bitcoin breaks through this key technical resistance, the market will be expected to open up new upside; but if it continues to be blocked, it may face the risk of long-term consolidation or pullback.
Technically, the MACD indicator also released a key signal. If MACD can form a golden cross above the zero axis on a weekly basis, Bitcoin is expected to usher in a new round of rising prices; but if MACD falls below the zero axis, the market may usher in a new wave of declines.
Bitcoin's recent volatility - both up and down - is normal, and there are two main reasons behind it:
First, there is uncertainty in U.S. policy.
The second is the current economic instability.
There may be a risk of a hard landing at any time. In such a market environment, large ups and downs and even liquidation are common. The key is to remain patient and wait for the results of the interest rate cut on September 18. The opportunity is ahead!
Reversal or rebound? On-chain analysis will reveal the answer
Global inflow/outflow data shows the average cost of investors and warns that it will be challenging to maintain the $61,335 to $72,500 range during a long period of consolidation.
A market lacking buyers could cause investors who bought at high levels to exit, driving more selling. In the long term, support could move below $56,000 and even to $49,795.
Miner reserves have dropped again in just seven days, falling by 1.08%. The drop from 1.97 million to 1.91 million is quite eye-catching.
Despite a positive net inflow on September 6, the stock market is still below neutral. In the past 30 days, exchanges have seen a staggering net outflow of 9,600 BTC, showing a tight market flow.
As shown in the figure, selling liquidity on centralized exchanges is significantly stronger than buying liquidity. In the 5% market segment, sellers clearly dominate.
This means that every price increase is likely to be seen by investors as an opportunity to sell, and this trend could continue for some time.
Can Bitcoin (BTC) break through the bottom area? Can the prelude to a bull market begin?
After analyzing the market trend, we found that Bitcoin is very likely to develop along the path of the second half of 2019. The lowest point has been confirmed at $49,000, and after rebounding to $52,500, the next step is to gradually break through various pressure levels.
Although history is often strikingly similar, it will not simply repeat itself. The purpose of studying history is to think about the future, not just to draw lines.
After comprehensive analysis, the current trend has a high probability of developing upward.
The recent rebound also shows a strong signal. Bitcoin's decline has become weak, and altcoins no longer follow the decline. Once there is a rebound, they quickly rebound, which shows that market funds are full of confidence in the future trend.
At present, the opportunity that the market has been waiting for is about to arrive. Funds continue to flow into Bitcoin ETFs, reaching 117 million US dollars per day, which is igniting the enthusiasm of the market.
Just like the horn that breaks the silence, the internal market has long been ready to pull up the market, but the external funds (ETFs) have not been able to cooperate. After two consecutive nights of positive capital inflows, the time for the market to pull up is ripe.
This week is a critical moment. If you haven't gotten on board yet, subsequent opportunities will become increasingly rare.
Investors who already hold stocks do not need to rush to clear their positions. They can reduce their positions moderately, but at least hold on until the end of this week! For spot operations, it is recommended to maintain a mid-term position and take advantage of the price difference (sell when the market continues to rise, buy when the market continues to fall). A sharp drop is the best time to buy, and the market adjustment expectations mean lowering excessive profit expectations. Steady operations are the wise choice.
Hold on to the high-quality assets in your hands and remind everyone that a big market is coming. You must be on board this rebound!
How to find opportunities amid uncertainty?
The key lies in how to deal with uncertainty. The current trend of Bitcoin prices has the potential to continue to rise, but also the risk of a correction.
As traders, we should not blindly predict market trends, but make rational decisions based on market signals.
As the Buddhists said, "Everything you can see is attached to form, and it is all false." Only by truly realizing one's own nature in trading can one be self-aware, self-enlightened, and self-salvated.
The future development of Bitcoin's price trend is beyond our complete control, but we can ensure that we always make wise decisions, maintain a respectful attitude towards the market, and flexibly adjust our strategies to cope with changes.
Price volatility and uncertainty are realities that all traders must face. We need to remain rational and avoid being swayed by market sentiment near the current key resistance level.
No matter how the market moves, our goal is to respond to market changes through scientific analysis and strategies to be prepared for any eventuality. This is not only applicable to the Bitcoin market, but also the core wisdom of all financial markets.
Summarize
Market trends and on-chain data analysis show that large investors currently have little interest in the current Bitcoin price range, and there is a lack of signs of large capital buying.
Compared with the strong rebound and bull market after the previous rounds of plunges, this round of prices has not attracted large investors to participate. Therefore, I personally believe that the current rise is only a short-term rebound after the decline, rather than a signal of market reversal.
However, don't worry too much. In the long term, the crypto market is bound to rise! It is expected that the conditions for U.S. stocks and currency circles to restart their upward trend in the future include: multiple rounds of interest rate cuts (significantly increasing market liquidity), stable growth of the U.S. economy (employment, GDP and other data will improve after interest rate cuts, increasing the risks of hedge funds and money funds) preference);
And the continued promotion of the AI investment wave (M7's performance maintained rapid growth). It is predicted that all this will kick off at the end of the fourth quarter of 2024 and the first quarter of 2025.
This is the end of this article for now; if you want to know more about exciting events in the circle, you can join the community for consultation!
