Supported by US data, expectations for a "soft landing" have increased. US stocks have suffered another setback under the premise of poor financial report expectations. Where will Bitcoin go?
Hi, girls and boys, welcome to Uncle Cat’s crypto world.
As of the time of posting, Bitcoin is priced at around 63,500. Bitcoin started a new round of volatile decline yesterday, once falling below the key support. Because the recent crypto market lacks independent narratives, it is mainly driven by the sentiment of the US stock market. In the early morning, although the Meta financial report of US technology stocks met expectations, it also raised risks for the future, resulting in a decline in the ability of technology stocks to boost the market this week, and several technology giants closed with a decline.
Tonight, the US economic data was released, and the economy is gradually declining, but the short-term decline is large, the job market is still in good condition, and the inflation index in the first quarter is under great pressure. Overall, except for inflation that has not been effectively controlled, the remaining economic data and employment data are in line with the expectation of a "soft landing" of the US economy.
Expectations for a rate cut were again significantly reduced, risk markets were hit again, and U.S. stocks opened with a sharp drop.
During this decline in U.S. stocks, can Bitcoin hold on to the key support below and wait for the U.S. stocks to rebound?
Bitcoin disk analysis:
From a purely technical perspective, the current sentiment is not very good, and the risk of short-term decline still exists and is not small, but this is not a signal of blind bearishness. The technical aspect is only used as a reference, and the current focus is still on market data changes and market sentiment.
Let’s talk about the rising resistance level first. The short-term resistance level moved downward during the decline and is currently around 66,000.
The current decline, falling below 65,000, basically falls below the bottom neckline of the daily M top. From a technical point of view, the decline will continue. The overall pressure is currently given to the support of 61,200. As the Fibonacci gold support level, coupled with the signals given by various indicators, this position has the best support effect, but the pressure is also huge. Once it breaks through, there will be little effective support at the integer level of 60,000 below and below.
There is still a lot of room for decline until around 55,000. Of course, the risk of decline cannot be completed overnight, it requires a process.
The RSI relative strength index has fallen to around 40. Once it falls below 30, it will trigger an oversold rebound sentiment.
Based on the current market situation, as long as the 61,200 position can withstand the pressure and form support, there will be a rebound in market sentiment. During this period, I hope that the US stock market can bring positive driving effects and help provide rebound strength for the support below.
We'll see later what answers the market data gives us.
Speaking with data: Changes in crypto market data and funds
Today's data adds stablecoin data.
According to today's data, the altcoin market still saw the largest decline in market value during the decline of Bitcoin, followed by Ethereum and then Bitcoin. After a few days of active stabilization, the altcoin market saw a retracement of gains again. As optimism about the US stock market turned into disappointment, the sentiment of the altcoin market changed significantly.
In terms of trading volume, as the price falls, the trading volume gradually increases, and the market is not blindly pessimistic. There is still buying power in the decline. If the trading volume continues to increase in the subsequent consolidation and decline, it proves that as the price falls, the buying power of traders increases, which can be regarded as a disguised decline to activate buying power. However, the Shanzhai market is indeed shrinking and falling, and the pessimism of Shanzhai is still strong.
In terms of funds, the retained funds on the exchange increased by 200 million, and the net inflow of off-exchange funds was 180 million, of which 330 million were from Asia, which continued to flow in steadily, and 150 million were from the United States, which continued the outflow of funds this week. At present, with the decline of the market, there is still no sign of the return of US funds. Currently, only the Eurasian market is supporting the price of Bitcoin. If we want Bitcoin to rebound significantly, we still need the power of US traders.
Macroeconomics and news:
Today, the US released GDP data. GOD is in recession, the job market is doing well, the number of initial jobless claims is decreasing, and PCE is seriously overheated in the first quarter. Jokingly speaking, I feel that the US needs to raise interest rates again. Of course, this is a joke. The possibility of the US raising interest rates is very small, unless it wants to explode.
However, judging from today's data, it is in line with the Fed's most desired result: a soft landing of the economy, slowing economic growth, good employment data, and although there is pressure on inflation, it is gradually decreasing. These are all signs of a soft landing.
However, the release of the data has basically greatly reduced the expectation of interest rate cuts again, because if the economy is declining moderately and inflationary pressure is reduced, it is in line with the expectation of interest rate cuts, but once the economic recession accelerates and inflationary pressure increases, it is not in line with the environment of interest rate cuts. The release of this data is obviously to maintain the strength of the US dollar and reduce the market's expectations for interest rate cuts.
The U.S. stock market accelerated its decline at the opening, and the financial reports of technology stocks this week were not very optimistic, which did not save the downward trend of the U.S. stock market. According to my expectation, the U.S. stock market will not collapse so easily before the interest rate is completely cut. However, now it seems that the United States has chosen the former to protect the exchange rate or the U.S. stock market.
Under the premise of poor performance of U.S. stocks, the crypto market has seen another decline. Recently, U.S. funds have been in a state of net outflow, U.S. stocks have weakened, the U.S. macro-economy has deteriorated, and U.S. bond interest rates have remained high. All these factors have led to a decline in the willingness of risk market traders to invest in venture capital.
I hope that the U.S. stock market will see a rebound at the close of this week tomorrow, which will stabilize the sentiment in the risk market.
Market summary:
According to the current situation and data, if the data supports the expectation of a soft landing of the US economy, then the risk market will have to maintain a period of "junk" time under high interest rates in the future.
Of course, the garbage time mentioned here does not mean that we should be bearish blindly. In the future, the market may enter a period of volatile decline, accompanied by breakthrough rebounds. The copycat stocks are not without opportunities, and sector rotation will still occur, but the duration will be shortened.
As for where Bitcoin can fall back to? It is impossible to judge now, because the passage of ETFs has given Bitcoin an additional channel for ETF purchases, which will increase the fundamentals and lower limits of Bitcoin. So now we can only take one step at a time. In the face of this market, we should reasonably control our positions and not panic too much.
In terms of contracts, you can reasonably grasp the range to do it, but you must pay attention that when sentiment is low, liquidity will decrease and volatility will increase, so pay attention to controlling risks.
This week, pay attention to the closing of the U.S. stock market tomorrow. If it closes with a rebound, the crypto market should be able to get a respite over the weekend.
By the way, Uncle Cat has recently cooperated with Binance to set up a novice school, where Binance staff and angels help newcomers provide novice teaching. If you are a confused newcomer who hopes to learn more knowledge, you can join this school. Actively participate in the content of the school, and have the opportunity to receive various exquisite Binance peripherals and red envelopes
Simply scan the QR code below to apply.
Finally, thank you all for your continued attention to Uncle Cat and thank you for your continued support.
If you need to open Binance rebate, you can use the link to register your Binance account and trade. If you trade frequently, remember to contact me for regular rebates.
https://accounts.suitechsui.io/register?ref=BJE84VSI
Invitation code: BJE84VSI