In the past 48 hours, the market has plummeted by nearly 8,000 points. There are several reasons for such a large correction:
The biggest reason comes from the unsatisfactory February PPI data released last night, which increased by 0.6% month-on-month and the forecast value was only 0.3%, the largest increase since August 2023.
The PP1 value once again exceeded expectations, triggering market concerns about continued inflation and making the public lower the probability of an interest rate cut by the Federal Reserve in June to 63.3%. If the economic data in these two months remains strong, the probability of a U.S. interest rate cut in the first half of the year will be become lower.
Last night's PPI index also caused the three major U.S. stock indexes to fall to varying degrees. U.S. bond yields rose, directly falling into the market, causing ETF capital inflows to slow down.
As of yesterday, a total of 238,950 Grayscale GBTC had flowed out, 9 ETFs had a total inflow of 453,466, and a total net inflow of ETF products was 214,516. From the data, yesterday’s ETF purchases were very limited, which gave the Air Force an opportunity to counterattack.
In addition, due to the entry of large institutions with large funds and frantic sweeps of goods in the market, a liquidity selling crisis has occurred, resulting in an overbought phenomenon. This can be seen from the recent large-scale liquidation events in the market.
In the past 24 hours alone, $680 million in assets were liquidated on the market. Among them, long positions accounted for US$545 million of liquidated assets, and short positions accounted for US$134.6 million. More than 193,000 people were affected by this large-scale liquidation, which led to massive market hemorrhage.
Many people say that these are malicious attempts to liquidate long positions at once, but people in Tang Dynasty are more willing to understand that this is a real correction. If we pay attention to the market trend, we will find that in the past few days, the pie has appeared in four consecutive waves. A substantial rise.
Yesterday, Tangren’s article also pointed out: The selling pressure to break new highs is bound to be considerable. These buying orders mainly come from short-term and long-term holders, plus miners and entities undergoing bankruptcy and reorganization.
In the past few months, big-pie miners have reduced their holdings more. Big-pie miners are constantly selling because they are preparing for the halving. The block rewards will be reduced starting with the halving next month. Due to the above policy reasons, it is inevitable for miners to sell when prices are reaching new highs.
In the future, if ETF inflows reduce or stop, the selling pressure on Bitcoin in the past few weeks or even months may be greater, and even cause a market downturn.
Fortunately, according to the current market feedback, major institutions are still full of confidence and have high expectations for the future value of the pie. If ETF funds can maintain a continuous inflow, they can absorb all the selling pressure from Bitcoin miners. , and even brought about further price growth. Next, let’s talk about the Cancun upgrade. With the Dencun upgrade successfully activated on the Auntai test network and about to be fully implemented on the main network, Auntai’s transaction processing capabilities and efficiency will be greatly improved.
With the new round of correction, Tangren still believes that it is the best time to deploy the currency of the Taitai ecological chain. In the long run, the investment income on the L2 track will exceed the pie ecosystem, especially the meme series is worth looking forward to.
However, it is worth everyone's vigilance that in a bull market, it is inevitable to have multiple shock corrections in a short period of time. In every bull market, there will be back and forth washouts.
There is only one purpose, to wash the leveraged contracts back and forth, clean up the short-term speculators, and shake off the hesitant people on the bus. When these burdensome burdens are removed, the bull will take off. The summary is: the market will not simply move in the expected direction, the road to success is tortuous, and once it goes in the opposite direction, most people will enter an endless loop.
The same is true for the market. The trend is certain, but it will never simply go in the predetermined direction. During the period, there will be many twists and turns to shake people's hearts.
At this time, you need to face it with a good attitude, not to be affected by short-term trends, not to be happy with the rise, not to be sad with the fall, keep your original intention, and always be open-minded. The investment market requires calmness and determination, and perseverance. Be determined and make profits in the bull market!
Finally, Tang Ren writes articles carefully every day in order to bring a certain reference and decision-making value to you who are reading the article. If you think the writing is good, please like and follow it. This is the greatest encouragement and support for Tang Ren. It is also the biggest motivation for Tang people.
