U.S. stocks plummeted last night, and Bitcoin did not escape the downward trend. The altcoins generally adjusted downward by about 20 points. The reason for the decline was also due to macro data. The JOLTs job vacancy data and ISM non-manufacturing PMI data released by the United States yesterday were both very strong. The 10-year U.S. Treasury bond rate also hit a 20-year high. The increase in job vacancies means that the unemployment rate may fall and more employment opportunities will appear. The PMI data exceeded expectations, which also shows that the economy is moving up.
These data indicate that the Fed will not change the pace of interest rate cuts and may only cut interest rates twice or even less this year.
This means that market liquidity will be limited, and there will not be so much new capital flowing into the U.S. stock and crypto markets. This also directly led to a sharp drop in U.S. stocks and a spike in contracts in the crypto market.
The market was originally developing in a positive direction. Currently, the probability of no interest rate cut in January has risen to 95%. The market just needs to wait for the fundamentals to be confirmed. If there is no interest rate cut in January, there will most likely be a rate cut in March. There will be a gap of 2 months in between, and institutions and whales are willing to wait for this window period.
Although the macro environment has been adjusted, the fundamentals of Bitcoin and the market are still unchanged. From the perspective of capital flow and sentiment, it is seriously affected by the U.S. stock market, which is what we call "Americanization". However, judging from today's ETF data, BlackRock alone contributed nearly 600 million in capital inflows to turn the tide and turned the Bitcoin ETF data into a positive number. This shows that the main force of funds did not sell out due to the decline, but instead took out more money to increase their positions. This shows that the main force of funds did not sell out due to the decline, but instead took out more money to increase their positions.
The good news is that many countries are currently considering incorporating BTC into their strategic reserves, including listed companies following MicroStrategy's example and incorporating Bitcoin into their balance sheets, including the giant Amazon. In addition, nearly 20 states in the United States have already begun to reserve in advance, so the low chips held now are not yet ready to be sold in batches, and the big bull market of 25 is still a long way off.
Whether there is a trigger point for the current market depends on two factors: Trump's positive policies and expectations of interest rate cuts.
Trump's strategy
It is not easy to land in the first few months, so there is only positive sentiment, so we must keep an eye on the expectation of interest rate cuts. After the data was released yesterday, the expectation of interest rate cuts in March was greatly reduced. If the expectation is reduced, the big cakes and cottages will adjust, and vice versa. If the probability begins to be vague, for example, it hovers between 40-60%, then the market is volatile. If there is volatility, you must be aware of the volatility. If you make a good profit, you must pocket it, and you can't be sloppy.
The probability of a rate cut in March will have to fall below 20% before it is possible to approach a lower point or even 9w. We will then focus on the two sets of economic data on the 10th and 15th, as well as the speech after the FOM meeting on the 29th to determine how the market will develop.
I have said before that the expectation of a rate cut will occur in March. I think the Federal Reserve also wants to see how the tariff rules will be implemented after Trump takes office, and whether it will have an impact on inflation two or three months after implementation. Trump only took office in late January, so the tariff rules will not appear until next month at the earliest, and the real impact of economic data will not be shown until March at the earliest.
If the Fed really only cuts interest rates twice throughout the year, each move must be extremely cautious. For example, it could cut interest rates once when Trump's policy is relatively clear, and then cut the second/third time after the impact of the policy on the economy is fully reflected in the data and the impact is not significant.
Therefore, you should pay more attention to the news in your daily life, and cultivate the ability to capture market opportunities and sensitive stages. These things will not appear on the market. Don't rely on the K-line. The K-line in a bull market is for you to find support and pressure, buy and sell orders, rather than staring at the cold K-line every day and let your mentality follow the K-line. Mastering the news will be enough for you to play a cycle of the copycat market.
Now the market has adjusted back to the situation before and after Christmas. In the future, we need to pay attention to this week's non-farm data, unemployment rate, etc., including what other information will stimulate the sentiment of this market, whether buying is greater than selling or selling is greater than buying. This will trigger demand for BTC. Only when BTC sentiment returns to normal will Ethereum be eligible to receive funds and lead the rise and fall of the altcoin.
If the data this week is conducive to multiple rate cuts, then the rate will be reduced soon. We can anticipate the data, but we cannot predict the market sentiment. We can only do our best to formulate trading strategies, including position control. We will constantly remind everyone that those who were trapped on Christmas and did not stop loss should reduce their positions when there was a rebound in the past two days. For example, last night G was around 0.04, which was also the price we recommended before. There was no loss before, and we were reminded to reduce positions last night. Therefore, strictly implement it so that you will not be eliminated by the market.
Finally, we can remain optimistic until Trump takes office on January 20. In the face of such a big event, it is greater than the macro impact. In addition, there is no bull market without altcoins. In any bull market in the cryptocurrency circle in history, the growth of altcoins has been far ahead of Bitcoin. The altcoin market may be late, but it will definitely arrive.
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