Last night, Bitcoin was hit by a massive short-selling counterattack when it was above $100,000, so it continued to fall this morning and has now fallen back to 96,500. In yesterday's article (Bitcoin stands at $100,000, a fire-breathing explosion? Emergency reminder from copycats! Do you hold on to the coin that has been worth 10 times as much? (Attached with the logic of the 10,000-point bull market)), I reminded everyone that Bitcoin would fall. As expected, it plummeted by $6,000 last night. Friends who read my article yesterday must have successfully escaped the top.
Many fans asked me why Bitcoin plummeted by $6,000?
This was mainly due to the negative impact of the ISM non-manufacturing PMI and JOLTs job vacancies data. In November, the number of JOLTS job vacancies in the United States unexpectedly increased by 259,000 to 8.098 million. The ISM non-manufacturing PMI rose from 52.1 in November to 54.1, and the price index rose from 58.2 in November to 64.4, a record high in 11 months, suggesting that inflationary pressure still exists. The two data lowered the market's expectations for interest rate cuts.
The probability of an interest rate cut decreased a month ago, contradicting the previous expectation of 2-4 cuts in 2025. The market expects a more than 95% chance that the Federal Reserve will not cut rates in January, which is why Bitcoin has plummeted.
Will Bitcoin fall further in the future? Where will it rebound to?
In my view, Bitcoin has only dipped a few points and will rebound later; it just requires more patience. This round of manipulation has stretched and then crashed, all to cleanse the contract market, and currently, Bitcoin has dropped enough around 96500.
Looking back at past time points and patterns, around 95800-96100 is the 0.618 Fibonacci retracement level of the previous uptrend, which has strong support and is considered a deeper correction but still acceptable. This area is also the previous support and resistance zone, and I think this pullback is about done, so we can prepare to accumulate long positions at lower prices.
Is there still a chance for a surge ahead?
It mainly depends on two points: (1) Trump's policies (2) Expectations for rate cuts.
Trump's policies have been difficult to implement in the past few months, so just keep an eye on the expectations for rate cuts. A significant recession in March's rate cut expectations will cause altcoins to drop; and vice versa.
If the probability is ambiguous, such as hovering between 40-60%, then the market will be volatile. In a volatile market, you need to be prepared for volatility, and if you've made decent profits, you should secure them instead of being overly ambitious.
After some data was released last night, the probability of a rate cut in March decreased to level 4, while the probability for May is around level 5. Additionally, Bitcoin has rebounded for 8 consecutive days, so a pullback is very normal; however, Bitcoin is still just consolidating. It may approach 91500 or even break below only if the probability of a rate cut in March falls below 20%.
Next, focus on the two sets of economic data on the 10th and 15th, as well as the remarks after the FOMC meeting on the 29th to assess how the market will move.
We need to be fully alert and buy low, sell high; absolutely do not sell at a loss and then chase prices when they rise later. If you are holding mainstream value assets, you can temporarily hold your position or manage to minimize the maximum drawdown. If you are in small meme altcoins, don’t consider averaging down, as there will be a lot of data released this week, with various positive and negative news oscillating, which can easily lead to your misfortune during this process.
The best approach is to lie low and wait for the washout phase to end. Currently, gradually enter spot positions, and for contracts, wait for a right-side entry.
