The August CPI released yesterday is very important. The August CPI was released, with a year-on-year increase of 3.2. This time, the CPI will drop from 2.9 last month to 2.5. The core CPI is 3.2, which means that the US inflation has smoothly dropped from nearly 3% to 2.5. This 2.5 figure is very critical, because it is only one step away from the US inflation policy target of 2%. At the last meeting of the Federal Reserve, Powell personally admitted that the Federal Reserve can cut interest rates without dropping to 2%. So 2.5 is exactly between 3% and 2%, giving the Federal Reserve the best window to cut interest rates.
In other words, this data is perfect and in line with the Fed's assertion that the economy is good, inflation is good, and employment is good. Therefore, this data is basically set in stone. The Fed cut interest rates by 25 basis points
But friends, please pay attention, there is a number in the data this time, which is slightly higher than expected, that is, the core CPI of the United States is 0.3 compared with last month, which is higher than the expected 0.2. So this number is likely to be used by the market tonight.
Market Analysis
At the time of writing, Bitcoin is 58,300 USD. From the K-line, the 1-hour and 4-hour levels are in an upward trend, but the strength is not very strong, and it feels like it is rushing to the last wave. The 12-hour and daily levels are in an upward trend. There will definitely be intraday corrections. Before the rate cut is implemented, the general direction is bullish. The intraday pressure level is 59,700, and the support level is 56,600.
As for the next rate cut, it will be after the presidential election. The Fed will definitely cut interest rates by 50 basis points to save face for the new president, similar to the amnesty of the emperors in ancient times after they ascended the throne, understand? No matter who the new president is, the first 50 basis point rate cut must be after the new president takes office, and then he will release a lot of money to stimulate the economy and win the support and goodwill of the people. This is a card that the Fed must play, almost like an open card.
Yesterday's Market Review
Trump almost lost the debate with Harris. The president who knows cryptocurrencies best lost the debate. Naturally, the cryptocurrency community paid the price. So it is reasonable that Bitcoin fell by $1,000. In the evening, the CPI data was released, and the U.S. stock market opened sharply lower. As a younger brother of the U.S. stock market, Bitcoin followed the decline. At this time, it had fallen to around 55,700. Many people were chasing shorts. Since there were so many people chasing shorts, it was reasonable for the dog dealer to take the opportunity to pull the market and explode the shorts. The market reversed in 2 hours. The leeks lost money and kept cutting losses.
Information worth noting in September
ECB interest rate decision (September 12) — interest rate decisions will affect the global economic environment and may indirectly affect the cryptocurrency market
Court ruling on Trump hush money case (September 18) - Political events may affect market sentiment, especially any ruling related to Trump may trigger market reaction
Summary of the Federal Reserve’s interest rate decision and economic forecasts (September 19) — The Federal Reserve’s decision has a profound impact on global financial markets, including the cryptocurrency market. Expectations of a rate cut could have a positive impact on the market.
The September rate cut is basically a done deal. It depends on whether it is 25 basis points or 50 basis points. If it is 25 basis points, it is in line with expectations. If it is 50 basis points, it means that the US economy will have a hard landing, which is a negative event.
Bank of Japan interest rate decision (September 20) - As the world's third largest economy, changes in Japan's monetary policy may also have an impact on global markets
CZ is out of jail (September 29) — If the news of CZ’s release is confirmed, this may have a direct impact on Binance and related cryptocurrency projects
Chicken Soup for the Soul
Cryptocurrency trading is a long-term plan, not something that can be done overnight, so don’t rush it. Even if there is a loss in the short term, there is nothing to be afraid of. As long as the subsequent direction is chosen correctly, what is gone will eventually return again.
