When I opened my eyes in the morning, I found that the whole world was falling. The US stock cryptocurrency concept fell sharply in the night trading. MicroStrategy fell more than 16%, Coinbase fell more than 13%, Ethereum fell below $2,100, and Bitcoin fell below $53,000. Japan's Tosho Index triggered the circuit breaker mechanism downward, and Japanese government bond futures also triggered the circuit breaker mechanism. The gold price plunged in the short term. This decline was entirely due to the drone attack launched by Hezbollah on military targets in northern Israel in the early hours of this morning. This attack has severely hit the accounts of retail investors.
The amount of liquidation in the last hour was about 369 million US dollars, mainly long orders. The decline of Ethereum this time is the largest in the mainstream, and it has wiped out all the gains of Ethereum this year. The reason for the sharp drop in Ethereum this time is that multiple whales were liquidated, which led to a series of stampedes in the market. However, this bull market may be to liquidate Ethereum. Jump trading began to sell a large amount of ETH on Sunday. These people can be said to be the first to know the news in the market. As of noon today, jump trading has transferred 17,576 ETH (46.78 million US dollars) to CEX again. The remaining 37,600 wstETH (101 million US dollars) and 11,500 STETH (26.3 million US dollars) are in the process of unstaking in Lido. Arthur Hayes, co-founder of BitMex, posted on social media that he learned through the news channels in the traditional financial field that a "big guy" had fallen and sold all crypto assets. This big guy refers to Jump Crypto, and now Jump's positions are dominated by stablecoins.
The probability of the Fed cutting interest rates by 50 basis points in September has increased to 69.5%, and the probability of a cumulative rate cut of 125 basis points by November is 60.1%. The plunge before the rate cut can be understood as the market vigorously clearing long positions, so that as many chips as possible can be accumulated at a lower price before the rate cut comes. If the rate cut day comes, a considerable amount of traditional funds will flow into the risk market. Therefore, such a violent wash before the big rise is commonplace for old investors.
Many people say that the US economy is in recession. When the Fed cuts interest rates, the market plummets. But in fact, the US economy is slowing down. The reason for the recession is that the US economy is growing slower than before. High inflation and high interest rates have brought a lot of pressure to the US economy, but their purpose is to suppress the economies of countries around the world and wait until the price is low to start bargain hunting. The Americans are not stupid. They will definitely not do a losing business. They are just taking a small loss now in order to get a high return later.
Many friends ask if it is time to buy at the bottom now? First, let’s look at Bitcoin.
Today, the lowest price of Bitcoin has reached around $52,300, which has fallen below the previous daily support of $54,260. However, the price has not fallen below the low of $50,901, which was the highest in history after the daily level rose through the moving average at the end of February this year. Therefore, from a medium- and long-term perspective, the bulls of Bitcoin are still on the train and have not followed the plunge of Ethereum. At present, multiple indicators at the daily level have entered the oversold range. There is a need for a short-term retracement, and today's Bitcoin trading volume should exceed that of Bitcoin on July 5. The short-term market's large-scale decline is a good opportunity to buy the bottom, so the current Bitcoin price is around $53,000, which Lao Gou believes is a suitable price to buy. The pressure above $70,000 is still relatively large at present, and it will take some time to break through $70,000 in the short term.
Let’s look at Ethereum again
Because of the massive selling of Ethereum by Jump Crypto and the liquidation of multiple whales during this decline, Ethereum plummeted by more than 20% today, with the lowest price reaching around 2111. From a weekly perspective, the decline of Ethereum this time is much stronger than that of Bitcoin, but the price has not fallen below the lowest point of 2100 at the beginning of the year. Therefore, from a medium- and long-term perspective, the violent wash of Ethereum this time is to liquidate exchanges and large investors on the chain. All investors who participated in Ethereum this year have lost money. 3562 has also become a strong pressure point at the short-term weekly level. Is it appropriate to buy the bottom of Ethereum at around $2,300 now? Of course it is appropriate. There are so many whales that have been liquidated in succession. Now the market panic has reached a high point this year. Others are waiting for a new low in fear. Now is the time when others are afraid of my greed. Even if the price reaches a new low, your greed should be intensified.
However, after saying so much, most of my friends' positions should be trapped, because many friends entered the market at the beginning or middle of this year. At that time, the cottage market was flying around and many friends wanted to enter the market to share a piece of the pie. Now, they are only left with big pants after being sucked by the dog dealer. This situation often happens in the bull market. Every time before reaching a historical high, the market must go through a violent wash. Let the market sentiment go from suffering to despair, let retail investors cut off their chips, and let the large positions explode and stop loss and leave. At this time, the purpose of the dog dealer has been achieved. Take a few large households with large amounts of money as scapegoats and publish them in the news to create panic. Retail investors' panic spreads and they begin to sell and trample in a chain, and the purpose of the dog dealer has been achieved. It will take a few more months to make the price of the currency multiply several times to break through the historical high, and the bull market will end quietly when the market is boiling.
Finally, I would like to share my current views on the market. The bull market is not over! Although many altcoins have skyrocketed this year, there has not been a grand event like DOGE SHIB, where everyone made money. Many people say that the overall environment is not good and everyone has no money. However, from the market value of the crypto market, we can see that the market value of the crypto market has hit a record high this year, but the proportion of altcoins has not reached a historical high. This shows that most of the funds are still in mainstream coins and stablecoins. The market has not transferred a large amount of funds to altcoins, which shows that the bull market has not entered the later stage. Therefore, at this stage, whether it is a loss or a significant reduction in profits, it is best to lie flat. The road to the peak bull market is very bumpy. If we persist to the end, we will get the results we want.
That’s all for today. If you have any questions, please leave a message in the comment section. Thank you for your long-term support for Lao Gou~
