Don't just focus on the current market situation, where prices rise and then fall, and rise again before dropping. You have long lost direction for the future.
Analysis of the evening's sharp decline: The low expectations for U.S. employment market data are a significant trigger for this plunge.
The market originally widely expected the Federal Reserve to begin a rate-cutting cycle in the first half of 2025, but reality is much more complicated than expected.
The resilience of the labor market means that the Federal Reserve may have to maintain a high interest rate environment for a longer period. Against this backdrop, the chain reaction triggered by the market's adjustment is particularly noteworthy; any negative news could prompt a panic sell-off, leading to further market turbulence.
What is even more concerning is that on-chain data analysis shows that the market's leverage ratio is nearing the peak levels seen during the 2021 bull market.
This high leverage environment significantly increases the market's vulnerability; once market fluctuations occur, investors may quickly withdraw, leading to a collapse in prices and a wave of liquidations.
Additionally, most Wall Street traders are pessimistic about rate cuts before July, which is exacerbated by the drastic drop caused by the negative data released before Trump's administration.
However, a decline is not a bad thing; it marks the beginning of a new round of positioning, as previously discussed in earlier scripts.
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