Bitcoin suddenly encountered selling pressure in the early hours of this morning (10th), and the price plunged from $62,400 to a low of $60,302. Although it has rebounded to $61,000 at the time of writing, it still fell by 2.09% in the past 24 hours, causing many investors to panic again.

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Bitcoin has fallen sharply again, why this time?

The U.S. Federal Open Market Committee (FOMC) released the minutes of its monetary policy meeting from the 17th to the 18th of last month last night (9th). The minutes showed that all Fed officials agreed to cut interest rates, but there were still differences on whether to cut by 1 basis point or 2 basis points.

Fed's Daly: One or two more rate cuts possible this year

After the release of the FOMC meeting minutes, Fed official Daly said he fully supported the decision to cut interest rates by 50 basis points in September, and said the Fed may cut interest rates one or two more times this year, but the extent of the September rate cut does not indicate the extent and speed of future rate cuts.

However, Citadel Securities is pessimistic about the rate cut expectations, believing that the strong US economy and stubborn inflation will lead to the Fed only cutting interest rates once this year. Michael de Pass, global head of interest rate trading at Citadel Securities, said:

I will go out on a limb and say we will end up seeing only 25 basis points of rate cuts over the rest of the year, and while the market is still implying a 50 basis point cut, that is a bit high both based on the strength of the underlying economy and the stickiness of inflation.

Market forecast: Fed may not cut interest rates

In addition, according to the latest data from the CME Fed Watch tool, compared with the previous consensus that the Fed will continue to cut interest rates in November, the market currently believes that the probability of maintaining the current interest rate unchanged in November has risen from 0 last week to 17.1%, the probability of a 1 basis point rate cut is 82.9%, and the probability of a 2 basis point rate cut has dropped to 0.

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With CPI approaching, Bitcoin is in a life-or-death battle, can it hold $60,000?

The US will release CPI data at 8:30 tonight, which I think is a potential turning point, and the trend in the past few days is in line with my expectations.

Since August, there has been a very obvious pattern in the market trend, that is, the market's lowest point is around the 8th of each month. This time point is often accompanied by the release of important economic data, and then the market starts to move up. The last few days of the month are the high point of the stage market, and then it goes down all the way. You can verify this with the K-line chart.

The current trend is still in line with this rhythm. It depends on whether there will be another wave of upward trend. The prices of various currencies have also come near the previous key support levels. Whether they can withstand the test of the third decline, if successful, can be regarded as repeated bottoming out.

The downside is that the long positions are very large now, and it is very likely that the long leverage will be cleared first, and then reversed. Contract players should still pay attention to short-term risks. In view of this situation, I have another guess that the main force will not take the lead in pulling Bitcoin, where long positions are concentrated. Instead, it will use Ethereum, which has not been optimistic about the long term, as a breakthrough point for the market, leading a group of cottages to rush upward, hit the money-making effect, and attract liquidity. In addition, the Ethereum upgrade narrative at the end of the year, the actual market also gives me the feeling that Ethereum is stronger. This is the script in my mind, and everyone can just laugh it off.

This round is very difficult and it’s not easy for everyone. Let’s persevere to the end. I believe the bull is still there and we can get the desired results!

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Future strategy (will be activated if decline is the premise)

first step:

The weekly line needs to break (break below BBI), and the daily line also needs to break (break below MA120)

Once the first step is completed, the signs of a downward trend will emerge;

Step 2:

Bottom warehouse problem:

1. If there is a slight decline, do not make a move; wait for a definite market to appear next week;

2. If a big negative line appears directly this week, I will go short and build a bottom position on the same day;

Step 3:

Adding to major positions: First look at the closing line this week. If it is a negative line, then see if it can continue to be negative next week. If it is a small negative line, add half of the short position. If it is a big negative line, go all in directly;

Step 4:

Regarding the issue of rolling positions: If the downward trend is established, the subsequent pullback will at most be around the BBI of the weekly line, so the point of adding floating profit to short is the BBI of the weekly line;

About shorting Xiancoin:

BTC is still the main currency. However, ETH has been too weak this year, so you can consider allocating 20% ​​of your position to short; because ETH has formed a weekly downward trend, and currently has rebounded from the bottom of MA120, and is suppressed by BBI. If the big cake fails, then ETH will break the MA120 and collapse.