Macro uncertainty increases, be optimistic while being alert to risks
Yesterday's analysis mainly mentioned the positive signals given by the market. Today, let's talk about the less positive macro liquidity signals.
After the release of the US October CPI data on Wednesday night, the market expected that the probability of the Federal Reserve cutting interest rates in December once rose to more than 80%.
The US retail sales monthly rate in October released on Thursday was 0.4%, higher than the expected 0.3%, and the previous value was also revised up from 0.4% to 0.8%, indicating that US consumption is still strong.
In the early hours of Friday, Powell said that due to the strong US economy, the Federal Reserve does not need to "rush" to lower interest rates, and the Federal Reserve will "watch carefully" to ensure that certain inflation indicators remain within an acceptable range.
As a result, the probability of the Federal Reserve cutting interest rates in December has dropped rapidly, and has now dropped to 62%. The sharp correction of US stocks in the past two days is also related to this. In addition, Trump's election has led to rising inflation expectations in the future, so the Federal Reserve's road to cutting interest rates in the future will be bumpy.
In addition, last week, the Federal Reserve's depository institution reserves, a key indicator of US dollar liquidity, also fell after rising for five consecutive weeks.
Overall, the macro liquidity environment faced by the crypto market still has great uncertainty.
The current rise is mainly driven by the market optimism caused by Trump's election, but the sustainability of this sentiment-driven market may not be that strong. In fact, after $BTC broke through the previous high, LTH has begun to distribute continuously, but there is a steady stream of new demand to drive the market to continue to rise. Once there is a serious overbought, the new demand is exhausted, and the market may reverse quickly.
Therefore, while we are bullish, we must still be vigilant about risks and always pay attention to market overheating signals, overbought signals and distribution situations