News

Pay attention to the CPI announcement in June tonight, let me share my opinion: Core CPI has a 45% chance of meeting expectations of 0.3% (good), and interest rates will fall a bit; there is a 45% chance of being lower than expected to 0.2% (good), and interest rates will fall significantly ; There is a 10% probability of being higher than the expected 0.4% (bad), interest rates soared, and US stocks fell. You can choose to go to Kokura for more!

Quotes

Big Brother, Second Brother, we are back to the familiar shock. In this case, it depends on the CPI data tonight. Usually, shocking market requires data or news other than technical aspects to stimulate and break the deadlock. CPI data can be the decisive factor in breaking the short-term pattern. Bitcoin is still relying on the 30,000 mark to maintain high-level range shocks.

Review of the macro picture

In May, I mentioned in my article that Bitcoin will recover its decline around the second half of the year and will likely rise to $30,000. I was right, and today I will talk in depth about whether Bitcoin can still rise!

Bitcoin completed its pullback and resumed its upward momentum on June 15, and completed the recovery in the next week and hit a new high in a year, reaching $31,432. After entering July, Bitcoin rose to a high of $31,500. So far, it has fluctuated in the range of 29,500-31,500 for 20 days.

Fed rate hikes

It is worth noting that in the past interest rate hike cycles, the market has been focusing on monetary policy regulation and the pace of interest rate hikes, but often overlooked an important issue: attracting global capital to flow back to the U.S. In fact, the Fed's interest rate hike policy is aimed at promoting the appreciation of the U.S. dollar by attracting capital backflows and supporting the development of the U.S. economy.

Looking back at the data in recent months, we can see signs of rising inflation. The consumer price index (CPI) released in mid-June increased by 4% year-on-year, higher than market expectations.

Although this data has begun to decline, it has triggered market concerns about inflationary pressure. At the European Central Bank Forum on June 28, Federal Reserve Chairman Powell made hawkish remarks, suggesting the possibility of consecutive interest rate hikes in July and September.

This information shows that regardless of whether inflation is persistent or not, the Fed will maintain a firm attitude towards raising interest rates. Suppressing inflation is only a nominal goal, and the real goal is to attract money.

Historically, there are two main situations in which the Fed stops raising interest rates:

First, the economic fundamentals have declined significantly and the unemployment rate has risen.

Second, unexpected risk events led to an emergency termination of the interest rate hike cycle

However, in the current interest rate hike cycle, there are no obvious signs of recession. The interest rate hike cycle will only end when domestic capital in the United States is insufficient to support economic expansion or a substantial recession occurs.

Looking forward to the performance of the crypto market and Bitcoin in the second half of the year or even the whole year.

First, the current total liquidity of the crypto market is much higher than the total liquidity of Bitcoin at the same price in 2020.

Secondly, the crypto market can always enjoy the liquidity transfer and overflow of US stocks

Furthermore, Bitcoin can be called a high-quality asset in all aspects. Especially in the context of tight regulatory pressure, Bitcoin is particularly popular.

I would like to reiterate that when liquidity is abundant, the most important factor determining asset prices is confidence. Of course, back to the beginning of the article, the market has written two scripts for Bitcoin - a callback after reaching $34,000-40,000, or a record high.

The panic selling of Bitcoin that began in June 2022 lasted for half a year, followed by three consecutive months of huge long-term gains and three months of low-volume declines. The signals we need to pay attention to are not only that it took Bitcoin six months to climb from US$15,500 to US$31,500, but also that the swing of Bitcoin in the high range is accompanied by a decrease in trading volume and a continuous increase in support. The selling pressure in the market is low, and there are indeed a large number of long-term holders who are willing to buy in the 25,000-29,000 range, and the short-term accumulation market is still developing.

summary

Considering the overall liquidity situation and the macro cycle, Bitcoin may not break through the previous high, but it will definitely approach the previous high. $40,000 may be a very conservative estimate. Hold on to the plan to break three! #达摩院 #合约锦标赛