In less than three months, US debt has reached a new high of over $1 trillion compared to before, with the total amount breaking through $36 trillion. Morgan Stanley predicts that the strong dollar will peak at the end of this year, after which it will enter a long bear market cycle.
Many partners do not understand the relationship between the strong dollar and risk assets. Simply put, when the dollar index, recognized globally as a safe-haven asset, is strong, global liquidity flows back to the US, and the liquidity of risk capital is in a state of depletion, similar to last year's crypto bear market; when the dollar is weak, capital flows out, risk capital liquidity warms up, and commodities and the crypto market soar. The two are in a trend opposition relationship.
So, even though Bitcoin has retraced nearly 8,000 points over the past two days, the overall bullish pattern of the crypto market remains intact relative to the macro environment. The dollar index is expected to bottom out next year, and a big bull market for crypto is on the way; both are products of trends, and we just need to be patient. This bull market cycle is still in a relatively early stage.
Macro-wise, tomorrow night the US inflation indicator October PCE price index and the Federal Reserve meeting minutes will be released. These two events will likely determine the range of interest rate cuts in December. It is expected that the short-term adjustment of Bitcoin will also end tomorrow night, and by the end of this month, it is expected that Bitcoin will likely cross the $100,000 high.
In the past 24 hours, the futures market has seen cumulative liquidations exceeding $700 million, with long positions accounting for $580 million. If Bitcoin maintains a fluctuation around 92,000 points and quickly pulls back to 68,000 points, the clearing funds for short positions will exceed $4.5 billion. The data shows that Bitcoin is still unlikely to continue plummeting.
As the cycle progresses, the mid-term adjustment of Bitcoin is likely to head towards the 80,000 mark, but the rebound at this point is likely to occur after the Ethereum market starts. In the past three days, Bitcoin's market cap ratio has decreased by 4%, and this data is still far from the arrival of the true altcoin season, so it is not yet time to panic sell.
I've been busy these days. Regarding the market, I believe that necessary adjustments are appropriate and timely. During the recent surge of Bitcoin, most retail investors were anxious. A proper pause shows that altcoins are no longer supporting the downward trend as they once did when Bitcoin's drop caused a flood of altcoins.
The overflow of Bitcoin liquidity lies in the high-level consolidation or appropriate downward movements, during which some traditional large holders or profit-takers from Bitcoin escape, bringing a surge of funds into small market cap tokens, creating a rotating wealth effect. We are currently waiting for the arrival of this liquidity transfer cycle.
BTC: The short-term support for Bitcoin's four-hour market broke and went down to the strong support zone between 91,000 and 92,600 points. As long as there is no breakthrough black swan event in the macro market, this position's support will likely be effective in the short term, with Bitcoin stabilizing slightly and the market rising again. From the daily perspective, the bullish trend of Bitcoin has not logically changed, so it is not yet a pessimistic moment for the market. The strong support area for Bitcoin on the daily chart is around 76,000 points, and the wide fluctuation area at a high level within 20,000 points is considered safe. Tomorrow there will be a lot of news, and the market is expected to experience wide fluctuations, with the futures market facing a bloodbath. (As a small risk reminder, some news says there is currently a risk of war, but multiple channels have not confirmed this. If a sudden drop occurs similar to previous localized short-term conflicts, just buy the dip, as a sudden drop often leads to a rapid rebound; the market environment is in an upward cycle.)
ETH: It is indeed too difficult for Ethereum to reach the turning point of 3,800 points; several months of attempts have not effectively touched it, and the current high point has reached 3,500 points. As Bitcoin's market adjusts and drops to the bottom four-hour support around 3,300 points, focus on whether this 3,300 level can be held on the daily chart. If it can, the next rebound will likely break the previous high from four hours ago.
Altcoins: The overall decline of altcoins is not bad, and there hasn't been a doubling drop like when Bitcoin corrected a quarter ago; it’s all normal trend linkage. After stabilizing, the first gradient suggests that the trend is still above the old mainstream, and the mainstream that has already risen has not triggered high-pressure zones, leaving plenty of room.
Other altcoins, discussion in the comments section.
The panic and greed index is at 79 today.
Finally, stay away from leverage and stock up on spot assets!
