Why did many people not wait for the expected decline when expecting BTC to bottom out again, but instead saw the price continue to rise? The reason behind this was actually revealed in the stock market on August 5. On that day, due to the combined influence of a series of negative factors such as the Japanese stock market circuit breaker, the expectation of a US economic recession, and the collapse of Jump, the BTC price fell below the 50,000 mark at one time. Not only that, after the opening of the US stock market, the price once again tested the 50,000 support level. However, with the release of manufacturing data, market concerns about economic recession have been alleviated.
The closing price of the US stock market on August 6 did not show a significant decline. The next day, the Japanese stock market was circuit-breakered, which seemed to indicate that the global financial market was gradually recovering and stabilizing. People found that the crisis that was originally worried about did not break out, and it was not as pessimistic as expected. The decisions of the Federal Reserve and the Bank of Japan showed their wisdom. They knew that the most important thing in the financial market was confidence. Once confidence was restored, risky assets would no longer be sold frantically, thus avoiding the occurrence of cyclical liquidation. Although the actual risks have not been completely eliminated, there is enough time and space to solve the problem. At least at this stage, it will not develop into a huge crisis.
Looking back at my analysis the day before, I mentioned the market trend after the Silicon Valley Bank incident. At that time, BTC rose to its previous high in just 4 days. Today, the market is rapidly recovering its lost ground and will soon face strong pressure in the 58,000 to 60,000 range. Judging from the timeline and price trend, 4 days have passed and the price is close to the 60,000 level. Therefore, I no longer recommend continuing to increase positions, but need to wait and see. The price increase from 50,000 to 60,000 is 20%, and the market may take a similar path as before and verify the retracement at the strong pressure level.
In general, the market is always changing and looking for a new balance point. Despite various risks and uncertainties, through observation and analysis, we can better understand the dynamics of the market and make wise investment decisions. It is crucial to remain calm and rational in the face of market fluctuations.
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