September started with a bang. The biggest risk in September is September itself, which is traditionally the worst performing month for stocks, bonds, gold and Bitcoin.
Since the Bank of Japan said that it would still consider raising interest rates if necessary, the market has actually returned to the sentiment at the beginning of August.
The Japanese yen carry trade arbitrage funds that started in 2022 completed the liquidation of at least half of the funds on August 5. The remaining half is betting that the Bank of Japan will not raise interest rates again, and the opening position is relatively advantageous.
Now this statement has begun to ferment, causing the Nikkei index to fall. I suggest you pay attention to it.
If the yen continues to raise interest rates, expectations will continue to be a resistance to price increases for a long time, especially in the early stages of the dollar's interest rate cuts.
After all, the depreciation of the US dollar will also boost the appreciation of the Japanese yen, so the remaining half of the arbitrage funds still need to be slowly closed. Although there will be no panic closing, there should be continuous selling pressure.
The market is more likely to proceed in the form of "oscillation + small and rapid step-down", that is, cutting meat with a blunt knife
During this period, in order to obtain liquidity, the market will occasionally liquidate a large number of short positions. This is completely predictable. If the short trend restarts, the longs will only bear floating losses at the spot level, while futures shorts may be repeatedly stopped out, resulting in a situation where it is clearly a short trend but shorting will lose more money.
The "Wall Street Fear Index" VIX soared again to above 20 last night. Whether the US stock market rises or falls tonight, the volatility will be large. If the US stock market rises tonight, it will prove that surges and plunges will become the norm in September. If it closes with a decline tonight, it is likely to usher in a bigger decline - which will prove that this is a substantial decline. The last crisis came quickly and went away quickly. This time, we may not be so lucky.
The market's current expectations for "interest rate cuts" are: first, a 100% interest rate cut in September, and second, multiple interest rate cuts this year.
Regardless of how you view the issue of interest rate cuts, I think everyone needs to prepare, and before that, it is best to reduce your leverage
The focus this week is on the non-farm payrolls report, but there was a huge shock before the data was released. If the non-farm payrolls data is not good, even if the interest rate is cut by 50 basis points, it will trigger a decline.
Markets are currently pricing in a 37% chance of a 50 basis point rate cut - after an overnight sell-off, expectations for a bigger rate cut barely moved higher
Bigger waves are coming
Investing in the crypto industry, ordinary people can get the benefits of solving big problems, which comes from the funds for building positions at the bottom. Only this part of the funds can get several times or even dozens of times the returns. It is not from trading to chase hot spots.
Among ten thousand aggressive gamblers, there will always be some who will become rich overnight, but these people may be finished tomorrow, and the gamblers who will become rich tomorrow are not the same group of gamblers who became rich last time.
The media always pays attention to these emerging gamblers, making this market seem to be full of stories of getting rich overnight.
Under the intensive brainwashing of the media, the newbies who had no idea about finance and investment were blinded and began to try the strategies of the gamblers. In the end, most of them were just a little bit exciting and then all left to the market.
Everyone must understand that today's crypto market is an extremely early stage market. There is no large-scale application. It is just a physical entity.
In such a market, although there are more returns, every step is full of risks. At the same time, this industry has a beta return that far exceeds other capital markets.
What we should do is to learn to invest in Bitcoin with spare money without knowing the industry, and learn to build positions in batches in a bear market.
Only after completing this step, can you consider participating in other
