U.S. stock drama: The Federal Reserve’s puppet on the “stage”, Bitcoin plummeted on the first night of ETF launch
The U.S. stock market has been like a wonderful drama recently. Before the Federal Reserve actually cuts interest rates, the stock market performance is as unpredictable as a puppet. Last night's CPI data had a negative opening, but it rebounded after the stock prices of Tesla and Apple plunged, and then caused market fluctuations due to collective declines. Wall Street continues to manipulate economic expectations through the media, trying to convince the market that core inflation is declining. Even if the data is not satisfactory, it still shows the Fed's "ability" to reduce inflation.
After a back and forth, U.S. stocks rebounded in the early morning, with little difference between closing and opening. Before actually cutting interest rates, the Fed is expected to continue to use anticipatory economic strategies to balance the stock market and prevent it from becoming one-sided. This relative stability is a boon to the entire risk market, the U.S. index, and U.S. bonds.
However, Coinbase's stock price did not rebound like other stocks in the early morning. The trading volume of the ETF on the first day was good, but the price continued to fall. This may be due to the high expectations that were previously met with a sell-off in cryptocurrencies and stock prices. It remains to be seen how market sentiment will respond to the downward forces.
In the Bitcoin space, the positive premium of the CME Bitcoin Futures Index narrowed and bullish expectations weakened. The positive premium of the futures market to the spot market is only 100 points, which is significantly less than before the implementation of ETF. After the delivery time of 16:00 this Friday afternoon, the sentiment of the futures market will become key.
The U.S. dollar index remains strong, remaining above 102, putting pressure on the trend of gold, which is currently quoted at around $2,033. Due to geopolitical issues in the Middle East, international crude oil prices have rebounded strongly again and are close to US$79. If they exceed US$80, they will return to the gold position.
On the first night when the ETF was launched, the price of Bitcoin fell significantly after rising. Short-term profit-making selling was the main feature last night. As ETFs run, if substantial gains cannot be achieved, selling may continue, which is a manifestation of the mentality of retail investors.
Of course, the short-term price decline will help to reasonably digest the selling pressure, and it will be more conducive to the later rise after the market falls and stabilizes. This drama is unfolding, and investors need to remain alert at all times and follow market trends.
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