Geopolitical conflicts are cooling down, the Federal Reserve is releasing QT signals, and Bitcoin sentiment is beginning to rebound. Can it break through smoothly?
Hi, ladies and gentlemen, welcome to Uncle Cat’s crypto world
As of the time of posting, Bitcoin is priced at around 63,600. Due to the temporary stabilization of geopolitical issues and the Fed's QT expectations, risk markets have begun to rebound. Market data is currently good, with good capital inflows. A breakthrough still depends on the motivation of US traders in the early morning.
Looking at the market through technology:
Bitcoin has already gone out of the downward trend from the 1-hour, 4-hour and daily levels. The large-scale 3-day weekly pattern has no downward trend for the time being. In other words, if the price rebounds within a certain period, the overall trend will not be directly changed.
At present, the effective support that can be seen at the daily level of Bitcoin is the 61,200 golden support level that I mentioned on Tuesday. However, this support level is effective on the daily level, but it is obviously broken and rebounded in the 1-hour and 4-hour levels. This shows that the liquidity of the current market has deteriorated, and the technical support ability has also deteriorated, especially in the decline and stampede driven by emotions, which makes it difficult to support.
Currently, due to the easing of macroeconomic sentiment, there is a sense of oversold rebound, and the sentiment has improved. The resistance level to pay attention to in the short-term rebound is currently 63,000, the middle line of the 4-hour Bollinger band. It is currently encountering a pullback from the resistance level, indicating that the rebound sentiment is still not too high.
For the second resistance level, pay attention to the breakthrough and stabilization of 65,000 and 67,200. Especially the latter, which is the key resistance level of the daily line. A breakthrough will change the daily trend.
As for the support below, the 61,200 gold support level is relatively important in the near future. After breaking through, the two support levels of 58,800 and 54,000 will be looked at.
The RSI relative strength index has rebounded to around 35, which has triggered an oversold rebound sentiment, but the market has not activated too many buy orders and is still a bit weak.
To be honest, I am a little hesitant to say too much about the support below, for fear that you will understand me as bearish. In fact, once 60,000 is broken, it will be troublesome. The best way is to fall in a shock. And from the current liquidity, the support is weak and it is easy to be broken by emotions. Be careful when trading contracts.
Let the data speak:
Although the total market value is declining compared to Tuesday, the decline is relatively small, only 4 billion, among which Ethereum fell the most, followed by Bitcoin. However, today's altcoins have brought an increase in market value. After being frightened by the decline of Bitcoin, altcoins have clearly shown signs of rebounding.
In terms of trading volume, the trading volume decreased significantly during the market rebound, proving that the selling power of the sellers decreased during the price rebound. Among them, the trading volume of Bitcoin and Ethereum decreased less, while the trading volume of altcoins decreased more significantly.
The data of funds showed good performance today. Compared with the data of Tuesday, the on-site funds increased by 800 million, and the off-site funds flowed in 1.39 billion, which means that 590 million of the funds directly entered the market for trading, and the other 800 million remained in the market waiting for the opportunity to buy. The inflow of funds still represents the traders' optimistic sentiment on the future market.
From the current data, we can conclude that although the market has fallen, traders are still optimistic about the future market and sentiment has slightly improved, but more efforts are needed.
Macroeconomics and news:
In terms of geopolitics, the Middle East, Russia and Ukraine, the Far East, and the South China Sea are all unstable factors, but at present, no one should want S3 to start, which should be the default consensus. However, the current geopolitical sentiment will still have a great impact on the risk market, but at present, as long as it is not a direct S3, the impact on the crypto market should be getting smaller and smaller. The same is true for the risk market.
Risk markets all set prices based on emotions and expectations. The same negative emotions and news will always have the greatest effect the first time, and will become smaller and smaller the second and third time. If S3 is not activated, then basically no matter how serious the geopolitical conflict escalates, the risk market will slowly adapt to this rhythm, but the overall sentiment will still not be too optimistic. Excessive tension will still limit the enthusiasm of the risk market.
The US interest rate cut has been greatly reduced. The most optimistic market expectation is the first rate cut in September, at least one rate cut this year. And the Fed is preparing to enter QT, which also consolidates the rebound of market sentiment after a significant decline. However, we are still not completely sure whether the Fed's rate cut is in line with market expectations. The best way at present is to confirm the rate cut cycle after the release of the June monetary minutes.
The current abnormal state of the US economy, coupled with the decline in domestic productivity, the disadvantages of foreign wars or proxy wars, and the decline in global confidence in the US dollar will all be important factors affecting the Fed's interest rate cut. Of course, in order to maintain the strength of the US stock market, the AI narrative will continue to ferment, which may be the last life extension for the US stock market before the interest rate cut.
The current QT preparation may be to help the Federal Reserve conduct an early test of interest rate cuts to test how the market and the U.S. economy react. Once deterioration occurs, the interest rate cut will be adjusted.
Before starting to cut interest rates, the US should aim to maintain the strength of the US dollar and US stocks, greatly reduce the market's optimism about the rate cut, ensure that the US economy develops healthily in terms of data, and then work hard to stimulate the recovery of the production industry. If Trump comes to power, he will do a better job of these tasks.
Market summary:
After the geopolitical conflict has cooled down, the market has gradually warmed up. The data shows that the market is gradually getting better, and the capital inflow is also good. However, it is still uncertain whether it can successfully break through the key resistance level. This still requires the efforts of American traders.
Regarding the issue of US interest rate cuts, the Fed is going to QT, which has eased the situation somewhat, but it cannot be ruled out that the Fed will continue to make hawkish remarks to intimidate the market. The risk market is originally guided by various US remarks and data, and now with the escalation of geopolitical issues, there are many unstable factors.
In general, if geopolitical factors cause risk markets to fall sharply, the Fed will ease its tone to boost the market. If the market is too optimistic, the Fed does not recommend using hawkish rhetoric to intimidate. Before the Fed actually cuts interest rates, risk markets may have to go through painful torture. Just be prepared.
For traders, the difficulty of recent contracts will be greatly increased, but for spot traders, there will be basically no problem in setting a reasonable risk line for themselves, and within the risk line, reasonably matching spot and extending the profit cycle.
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