$BTC The rebound seems to have eased the market sentiment a little, but don't be too happy too soon. There are three key factors behind this rebound. However, the current market situation is still not optimistic, and this rebound may only be a temporary "respite". #美降息25个基点预期升温
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📌1. US CPI brings short-term benefits
After the US CPI data for August came out, the market's concerns about inflation seemed to have eased a bit. The year-on-year growth was 2.5%, slightly lower than expected by 0.1 percentage point, and the month-on-month growth was 0.2%, which was still within everyone's expectations. However, the core CPI data was not so optimistic. Housing costs rose sharply, and transportation service costs soared by 0.9%, directly driving the core CPI to increase by 0.3% month-on-month.
After this data came out, the market immediately bet that the probability of the Fed cutting interest rates by 25 basis points in September soared from 71% to 85%. The positive impact of the rate cut has driven the rebound of Bitcoin. After all, the cost of funds is low, and asset prices are naturally pulled up. But don’t forget that core inflation is still continuing, which means that the Fed has not relaxed yet, and the next monetary policy is still full of variables. Don’t think that the interest rate is being cut now, the Fed may change its face again in the future.
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📌2. Bank of Japan: Raising interest rates while releasing liquidity
The operation in Japan is even more interesting. The Bank of Japan directly launched the "rescue method" to provide immediate liquidity for government bonds, and continued to release liquidity by lending to the Japan Pension Investment Fund (GPIF). To put it bluntly, the liquidity of the Japanese stock market and foreign exchange market has been tight, to the point where "it must be rescued, otherwise it will collapse."
However, this rescue operation is simply a stopgap measure. Temporary relief does not mean the problem has been solved. Leveraged funds and hedge funds in the Japanese stock market may explode at any time. Once they explode, it will be a series of long-term killing of longs, and the result will be quite ugly. Moreover, this operation is only delaying time, and sooner or later, we will have to face the situation of another outbreak of liquidity crisis.
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🎯The market is far from stable, don't let your guard down
But at the same time, the yen appreciated rapidly against the dollar, which posed a big problem for the Bank of Japan. Logically, when the dollar rebounded, other currencies should have depreciated, but the yen did not follow the routine and rose instead. The highest intraday price reached 140.7, and there was even room for upward movement.
With the yen rising so much, the Bank of Japan has to continue to release liquidity in an attempt to stabilize the Japanese stock and foreign exchange markets. However, isn't it cosplaying the Federal Reserve while raising interest rates? How long can it last is still a question. If the yen continues to appreciate like this, the Bank of Japan will probably have to continue to release liquidity. How long can it last? It depends on how long the Bank of Japan can keep bleeding.
Therefore, this wave of Bitcoin rebound may just be a temporary respite, and it is hard to say what will happen next. The actions of major central banks, global liquidity issues, and economic fundamentals are all potential bombs for market instability. Smart investors still have to keep their eyes open, keep an eye on these variables, and be prepared to deal with the next risk fluctuations.
Peace✊
