In the past few years, such as 2016 and 2020, Bitcoin (BTC) seems to follow a pattern: it falls before elections (especially midterm elections) and rises after elections. Looking at historical data, the market trends after two consecutive midterm elections have verified this, although there have been one or two abnormal situations.
After this election, the market is likely to face a big correction. This is because after the election, the Federal Reserve may announce that inflation is out of control and continue to raise interest rates to deal with it. If this move triggers hyperinflation around the world, the cryptocurrency market may see a sharp rise as a result.
Recently, the one-year inflation rate in the United States in May soared from 3.2% to 3.5%, which directly affected the market's expectations for interest rate cuts and caused the market to fall. However, we don't have to panic too much. From the bottom of 16000U to 73000U, the increase is about 4.6 times. It is very reasonable to pull back and consolidate after such an increase.
As the Bitcoin spot ETF market cools down, market liquidity has decreased, which can be seen as a halftime break in the bull market. The market is expected to fluctuate for several months, waiting for the water storage effect of the interest rate cut policy. This stage may be the last opportunity for investors to increase their positions. From technical analysis and K-line trends, the judgment of the macro trend will not be wrong. The second half of the bull market is often more exciting. When everyone thinks the bull market is over due to panic, the real opportunities may just begin to emerge.
Because short-term market conditions are always full of variables, I firmly believe that the market has its own rules, and what is coming will come. For investors, it is more important to do a good job of their position allocation. If you do not have a continuous source of cash flow, keeping 30% of USDT may be a reasonable configuration. Respect the market and stay rational to survive and make profits in the long run. No matter how the market fluctuates, we will remain optimistic and positive, and do not fall before dawn.
