With the halving date approaching and the market expecting a rate cut recently, let’s talk about whether there will be another opportunity to get on board during a big pullback in the future (before the general election on November 4)?
Since BTC pulled back to 60,700, it has been hovering between 65,800-73,000. As shown in the figure below, there seems to be a strong trend of building a new bottom between 65,800-70,900
What will happen next? Can it break through 73,700 in the near future, that is, before the interest rate cut?
I can't say that this is completely impossible. As long as ETFs are strong (not strong this week, net outflows). If we look at the sentiment, it will reach around 72,800 on the 8th. After all, urpd data shows that the resistance above 70,900 is not large. The key is how high it can go after breaking through?
Can ETF continue to support the rise? The previous high of 69,000, that is, reaching 73,700, triggered a large selling pressure of profit selling, especially GBTC, which went down after the increase of less than 5,000u. Obviously, there is not enough funds and the selling pressure is very large. What if it breaks through 73,700 this time? The overall environment and liquidity have not changed fundamentally (the chart of the US dollar liquidity index and BTC trend shared earlier is as follows). And now it is getting closer and closer to a rate cut. So, where does the money come from to continue to support the big pull?
If it breaks through 73,700, it won’t go very high, so profit-taking will increase the selling pressure, and the interest rate cut is getting closer and closer. Where can the correction go?
There are a few points to note here:
1. Liquidity problem: In 24 hours, only the US time zone, that is, 21:30 to 6:00 the next day, has good liquidity. The liquidity is not good at other times. It is even worse on weekends. Don’t forget that the two major crashes from 73,700 to 60,700 occurred during the daytime in Beijing time. So you should pay special attention.
2. Funds in suspected risky markets may be withdrawn. Why do you say that? You can observe from mid-to-late March to now. Gold, silver, and commodities are all rising, and gold has even reached a new high. However, S&P, Nvidia, and BTC have been fluctuating since hitting a new high in mid-March.
You can say that the new high of gold is due to geopolitics and war, but it is also possible that it is due to the expected interest rate cut. Of course, it is unlikely to cut interest rates in May, and the probability of June is getting lower, that is, July. It is only April now, so it is still early. However, this behavior may be suspected of capital withdrawal. Maybe Q3 is risky.
Of course, some friends also said, you see, gold rose last night, US stocks fell, and BTC rose. This is BTC following gold. I can't help but ask, gold is a global consensus safe-haven asset, how many people think BTC is a safe-haven asset? How many?
3. We should continue to pay attention to the inflow and outflow of ETFs, especially GBTC, as well as the inflow and outflow of stablecoins. In fact, more stablecoins
(The overall ETF data in the past half month is not optimistic. There is either a net outflow or a barely net increase in holdings, and there is no significant net increase in holdings)
4. In fact, whether the interest rate cut is expected or the first confirmed interest rate cut, it is not very scary. What is scary is the recession, that is, the bad external environment plus the BTC self-narrative, which triggers the black swan event, which is the most likely to cause panic. The consequences are self-evident. (This requires attention from many aspects, and the black swan cannot be predicted)
To be honest, a pullback is possible. I cannot predict how much it will be. I can only judge it based on the sentiment and the overall background of funds. I will continue to post reminders later. What I want to say is that now that BTC has returned to 71,000, has the altcoin returned to the same period? No! This is the weirdest thing.
If BTC breaks 6 or even lower due to poor liquidity, interest rate cuts, or other fuds, what will happen to the altcoins? Can they hold up? This is what I mean by a possible pullback opportunity.
