Many of my friends have been questioning me in the past two days, asking why I am not optimistic about the trend of Bitcoin this week.

I have already provided my opinion in an earlier post.

I'll just put it here, please feel free to criticize.

“The price of Bitcoin fell from 57,000 at the beginning of the week to 54,000 now.

The decline was about 4.6%.

The price of Ethereum fell from 2400 to around 2300.

The decline was about 4.2%. What about the market sentiment?

The Fear and Greed Index has dropped from over 40 last week to over 20 now.

From the panic to the non-very panic range.

Looks miserable, doesn't it?

This week could be even worse!

First of all, September is a disaster month, which has been repeatedly reinforced by investors and has become a situation that is bound to happen.

Secondly, all the data from last week pointed to unsatisfactory performance.

Everyone is once again worried that the US economy will fall into recession again.

Such concerns may further ferment and trigger a chain reaction in the market.

Finally, the CPI data released this week may cause further market turmoil.

Now, whenever the market is turbulent, the Fed will speak out.

Whenever the Fed speaks, it's bad news.

Whether it is the expectation of a 25 basis point rate cut

Still, the expectation of a 50 basis point rate cut will be bad news.

The combination of bad news and bad emotions constitutes a double kill.

Therefore, it is highly likely that this week will still be a week of decline.”

one,

According to Coinglass data, the total market value of cryptocurrencies has exceeded 194 billion, with a 24-hour trading volume of 39.358 billion US dollars.

If you are sensitive to numbers, you should be able to see something from the numbers. When the total market value of cryptocurrencies peaked, the total market value exceeded 2.4 trillion. Now it has fallen by 20% from the total market value at that time. This 20% is not an exaggeration. I have told you many times before that when the cryptocurrency bull market comes, it often experiences a 30-50% drop. The current drop is just brewing emotions. If we expect Bitcoin to improve in October and truly stand in the upward channel of the bull market, then we must expect to see that the drop must be further expanded.

This is the basis for my judgment on the trend of Bitcoin in the next three weeks. Only by replicating the same sentiment as on August 8, and replicating the same global capital market environment and global capital market consensus as on August 8, will there be a possibility of touching 49,000.

In the current environment, the capital market has reached a consensus that the United States is oscillating between a soft landing and a hard landing, and the attitude of the Federal Reserve is crucial. However, due to the Fed's previous excessive communication with the market and too many wolf-crying incidents, interest rate cuts have become the Fed's weak point. A 25 basis point cut is wrong, and a 50 basis point cut is still wrong. Not cutting interest rates is still wrong. The option of raising interest rates does not exist.

If the interest rate is raised, the US market will be directly circuit-breakered, and then the global market will collapse. 100%, no exceptions. So after the interest rate cut is implemented, the market is likely to fall, the difference is whether it will fall sharply or slowly.

From our heart's point of view, we also hope for a crash, so that the market will fall to a sufficient depth, and then we can confidently buy at the bottom.

In contrast, a slow decline and slow bleeding is the last thing we want to see. It's simple, you don't know where the bottom is. After you start, you find that there is a bottom below, which has a greater impact on the market sentiment.

two,

But it is not that there is no good mood. The most sensitive to policy is the US 2-year Treasury bond, and the yield of the US 2-year Treasury bond has dropped from more than 5% in April to around 3.7% now.

The yield on the 10-year U.S. Treasury bond has also dropped from more than 4.5% in April to 3.7%. What does this mean? It means that the long-standing inverted bond interest rate situation is about to change.

So what is an inverted bond rate? This is quite complicated, so I won't explain it to you. You just need to know that, generally speaking, when the Fed's bond rate inverts, the economy will have problems. When the Fed's bond rate resolves the inversion, the economy will be on the rise.

At present, the rise of US bonds has reflected the market's pricing of future Fed rate cuts. The most intuitive phenomenon is that relatively low borrowing costs have also promoted the rise of corporate bonds, which has greatly eased the pressure on the financial market. Why? Liquidity has been released!

We have discussed this many times. As cryptocurrency investors, we are not that concerned about whether interest rates will be cut or not. We must always remember that liquidity is the lifeblood of cryptocurrency.
The increase in liquidity is the basis for the continuous growth of cryptocurrency.

Therefore, no matter whether the extent of the rate cut is 50+50 or 25+25+25, an inevitable conclusion is that the positive release of liquidity, coupled with the traditional release of liquidity in the United States in Q4 to stimulate consumption, is unstoppable and inevitable.

three,

We are eagerly looking forward to the price of cryptocurrencies in the next two days. We are also looking forward to the Fed's CPI data on Wednesday and the August PPI data on Thursday. In a word, we are not afraid of the decline of Bitcoin, and even embrace it with both hands.


Let me end with Gorky’s The Seagull: Let the storm come even more violently!