Although BTC is regarded as the ultimate safe-haven asset of supranationalism, it must be admitted that it is still in the stage of risky assets, especially directly affected by the macroeconomic policy of the US dollar. Last week, the relatively mild speech of Federal Reserve Chairman Powell caused BTC to rebound to $63,000. But a few days later, it fell to the $60,000 mark because another member of the Federal Reserve emphasized the 2% inflation rate bottom line.
The 5% swing up and down, as well as the sharp drop in trading volume compared to March, show that the market is in a boring phase.
We have detected net outflows of USD stablecoins for the first time since the end of October last year. US ETFs have also temporarily shrunk significantly, with both net outflows and net inflows shrinking significantly compared to March and April.
As mentioned before, once it hits $60,000, it reaches the strong support zone of $55,000-60,000, which is the mining cost price of miners, the average cost price of ETFs and the short-term break-even point. Because of the weak breakthrough and the lack of good news on the macro level, this support zone has reversed into a stampede zone, which in turn has an increasing probability of the market penetrating to $55,000.
For investors who lamented in March that BTC was rising too fast and they were unable to get on board, this is a very subtle test: if the current price drops another 10%, the market will provide a good window for entry, so will you take this opportunity to enter?
Market sentiment tends to chase ups and downs, and fear accumulates in long-term weak consolidation. If you can see that the following things have high certainty in the next two years, then this may be an opportunity worth considering.
First, although the interest rate cut has been postponed, stagflation has also begun to appear, and the recession seems to have arrived, which is the strongest motivation for the interest rate cut;
Second, the US election is often a catalyst for market boosts;
Third, the effects of BTC’s first three halvings (a big bull market within 18 months after the halving) have not yet been reflected.
Supply and demand structure
On average, the on-chain profit margin of BTC investors is about 1.1 times; this figure reached 1.7 times in March; the investment of short-term investors has declined from a profit of 40% to 1%, and the loss is only a 5-minute K-line away.
We must emphasize that in the past two years, short-term investors' losses are a sign of a stage bottom. The short-hand profit and loss indicator will only show a -10% phenomenon in an extreme bear market (at the end of 22 years).
US ETF funds reversed the sharp outflow of the previous week, with a net inflow of $117 million last week, up from a net outflow of $434 million the previous week. But I expect this week to return to a slight net outflow track.
Last week, stablecoins outflowed $460 million, the first significant outflow since the end of October last year. Of course, this is only the first net outflow since the stagnation of stablecoin net inflows since April 20, and whether it will continue remains to be seen. Compared with the cumulative net inflow of $15 billion in March and April, this is only a weak signal.
As of April 28, the number of coins held by centralized exchanges was 2.333 million, 3,000 less than last week. Overall, the change in the stock of BTC in exchanges has been low in the past month. The purchase volume of exchanges also increased slightly from US$5 billion last week to US$7.1 billion.
Overall, the market is in a wait-and-see mood, the pace of new capital inflows has slowed significantly, and the market is in a fragile balance.
At the openAI meeting yesterday, we reminded everyone in advance that if WLD rises a little, they should sell first. Sure enough, it rose to 6.3 in the evening and then fell all the way. It is currently at 5.2 and there are still signs of falling. You can buy again when it stabilizes.
Next 3 big things
1. Powell will speak at 10 o'clock tonight.
2. The key US inflation data CPI will be released at 8:30 tomorrow night.
3. A new stage in Israeli-Palestinian peace talks
The key is to see whether the CPI data will determine the bull or bear market. Whether the Fed will cut interest rates this year depends on it. If it is higher than expected, BTC will break $60,000, and if it is lower than expected, it will start a deep V reversal.
The current strategy is the same as what I have repeatedly emphasized to you in the past few days:
(1) Do not go short to avoid missing out. It is recommended to control your position.
(2) Don’t chase high prices when the stock rebounds, or you will be trapped
(3) Reduce or increase positions after the CPI data is released
By making good use of the information gap in macro information, you can follow the trend and make profits.
Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together. If you have any questions, you can comment and ask questions
