BTC Long and Short Battle Intensifies: Dual Test of Options Expiration and Volatile Market

Hello everyone, let's talk about BTC's recent market performance and the upcoming trading strategies. Last week, after the daily MACD golden cross, BTC had a chance to break through the channel and initiate an upward trend. However, following the Federal Reserve's interest rate decision meeting, BTC fell along with US stocks, and the continuous large redemptions of ETFs directly disrupted the upward structure.
Next, there is a very critical point: this Friday is the Q4 options expiration date, which is the largest expiration scale of this year. Historically, such a large-scale expiration often has a significant impact on the market, and BTC's recent decline seems to be preemptively digesting the pressure for the chip game before expiration. The Q4 options resistance level I mentioned in the middle of this quarter—100K-110K—now appears to be in line with expectations.

Short-term observation:
1. Key support levels: There are two important support levels below: 92,000 and 85,000. These two positions have relatively thin trading volume, but 85,000 is currently the strongest support area. If the price continues to fall and breaks through 92,000, 85,000 will be a good opportunity for bulls to position on the left side.
2. Impact of ETF outflows: Recently, the continuous outflows of ETFs have been putting pressure on the market; in the short term, it is necessary to observe whether the outflow trend will stop. Once the outflow slows down, combined with the performance of the support levels, it may provide an opportunity for the market to stabilize.

Currently, it seems that the weekly trend of 67,717,638,431 has come to an end, and the market is likely to enter a volatile phase. Trading strategies also need to switch from trend thinking to volatility thinking to avoid chasing highs and cutting lows. In summary, the key is to trade within volatility when in a range and to trade trends when in a trend. The challenge lies in knowing when to switch from volatility to trend and from trend to volatility. Feel free to share your thoughts in the comments!

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Disclaimer: The content of this article is for reference only and does not constitute investment advice.

Tonight the CPI will be revealed, will the Federal Reserve's interest rate cut path change as a result?

At 21:30 Beijing time tonight, the U.S. Bureau of Labor Statistics will announce the November CPI data, which is the last important economic indicator before the Federal Reserve's December meeting. The market expects:
The year-on-year growth rate of CPI will slightly rise from 2.6% to 2.7%, and the month-on-month growth rate may also slightly increase to 0.3%.
Core CPI (excluding food and energy) year-on-year growth rate may remain at 3.3%, with month-on-month unchanged at 0.3%.

The probability of an interest rate cut is as high as 86%:
The market generally believes that the Federal Reserve will cut rates by 25 basis points at next week's meeting. According to the CME FedWatch tool, traders' bets on a rate cut in December have reached 86%. Particularly last Friday, several Federal Reserve officials released “dovish” signals, emphasizing that the upcoming monetary policy will be more cautious.

Can the CPI change the Federal Reserve's mind?
Bank of America’s view: If tonight's data is “harder” than expected (for example, if the month-on-month growth exceeds 0.3%), it might lead the Federal Reserve to reassess its interest rate cut plans.
J.P. Morgan's perspective: Tonight's CPI data might be the least “influential” data of the year. With the Federal Reserve having shifted its focus to the labor market, unless CPI experiences a change of more than three standard deviations, the current policy stance will not be shaken.

To summarize:
For tonight's CPI, the market's assessment of its influence is relatively limited, but it is still worth paying attention to subtle changes in the data. If the CPI is below expectations, it may further consolidate the current stance; while if the CPI grows beyond expectations, although it may not directly prevent a rate cut, it could make the Federal Reserve's policy next year appear more conservative. For investors, the importance of upcoming labor market data cannot be overlooked.

Disclaimer: This content is for reference only and does not constitute investment advice.

Bitcoin plummets sharply, with liquidation scale in 24 hours far exceeding 312; what’s the outlook for the market?

Early this morning, the price of Bitcoin plunged sharply to $94,000, causing the market to collapse instantly, dragging down altcoins as well. The scale of this liquidation has already surpassed the 312 event in 2020 and the 519 event in 2021, especially with high-leverage long positions suffering heavy losses, and altcoins have become the main victims of the liquidation wave.

The main reason behind this crash is the risk exposure of high-leverage trading. Leverage traders were concentrated liquidated during the market's violent fluctuations, creating a chain reaction. Unlike the external factors of the 312 event, this time it is more a result of the internal leverage going out of control in the market. This once again reminds us that in a highly volatile market, managing leverage is really important.

What’s the outlook for the market?
Key levels of #比特币 and #以太坊 : Bitcoin needs to stabilize above $100,000 to maintain market sentiment; Ethereum needs to retest the resistance level of $4,050 to boost confidence.
Do altcoins have a chance?: Although the liquidation for altcoins is severe, those with solid fundamentals and strong community support may have room for rebound after the pullback.
Institutions are in action: The influx of institutional funds and improvements in on-chain data may provide a foundation for market recovery, while retail investors' high-leverage operations remain a major risk point.

According to CoinGlass data, the overall performance of the crypto market at the end of the year and the beginning of the year has been relatively flat, with increased volatility but unclear trends. A reminder, the crypto market is highly volatile, especially in extreme conditions like recently, improper use of leverage can easily lead to liquidation. For upcoming investments, pay attention to the macro environment and market data, stabilize risks, and lay a solid foundation for long-term layout.

Source: MarsBit
Disclaimer: The content of this article is for reference only and does not constitute investment advice.

Today's US non-farm data released is better than expected, with an increase of 227,000 non-farm jobs in November, the largest increase since March of this year. The US unemployment rate data released is 4.2%, which meets expectations and is relatively friendly for future interest rate cuts. #非农就业数据 #失业率 #降息

Recently, #比特币 broke through 100,000 US dollars, and the market sentiment was high, but many people were worried during the rise, and did not think that the real violent bull market had arrived. One of the reasons was that the United States entered #降息周期 , and the Federal Reserve said that it would cut 200 basis points within a year, and there were too many uncertainties.

Since 1980, the United States has made six major interest rate cuts. From previous economic cycles, it can be seen that the Federal Reserve rarely achieves #软着陆 . Since World War II, the United States has only achieved a soft landing in 1995. Apart from that, it has inevitably entered an economic recession. In fact, it is not because of the economic recession caused by the interest rate cut, but often the economy has already begun to decline, and then the interest rate cut policy is adopted to stimulate the economy, which creates the phenomenon that the interest rate cut will cause an economic recession. Of course, more people now begin to believe that this time the Federal Reserve is expected to achieve a soft landing, and that Powell's expectation management is very good. The US economy is still strong, but risks must be guarded against.

Historically, after the start of the interest rate cut cycle, #经济危机 is prone to occur, such as the oil crisis in 1981, the Latin American debt crisis in 1985, the Gulf War from 1990 to 1991 and the Japanese bubble, the Internet bubble from 1995 to 2001, the subprime mortgage crisis in 2007, and the epidemic from 2019 to 2020. This is also one of the reasons for our concern. We don’t know whether the rising prices will collapse due to external crises.

We cannot ensure that similar situations will not occur in this round of interest rate cuts. There are too many influencing factors, such as the Russian-Ukrainian war, such as the tariffs after Trump took office mentioned in the tweet below, the Sino-US trade war, such as the debt crisis. Many countries are currently facing the problem of increasing debt, and extreme climate problems, etc. Therefore, it is necessary to remain cautiously optimistic! However, risks and opportunities coexist. Once a crisis occurs, it will eventually be accompanied by crisis digestion and economic recovery. Every interest rate cut will inevitably trigger #流动性过剩 in the long term, and funds will flow out to find investments with higher returns. I hope everyone can avoid risks and seize the opportunities of young people. 💪💪💪

2025: Institutional Relay, Is the Golden Age of Bitcoin Coming?

This year, Bitcoin surpassed $100,000, with institutional investors being the biggest contributors. Throughout 2024, the flow of funds in the Bitcoin market has been completely dominated by institutions. By 2025, this trend is not only expected to continue but may also be further amplified—because forces such as U.S. pension funds and sovereign wealth funds are gradually entering the arena.

What role do institutional investors play?
Let's talk about the data. In 2024, institutions purchased how much Bitcoin through spot Bitcoin ETFs and large holders like MicroStrategy? 683,000 coins! Moreover, in just a few weeks after the U.S. elections, 245,000 coins flowed in. Standard Chartered analysts predict that the pace of this institutional inflow will not slow down next year and may even accelerate. Now, looking at MicroStrategy, they already started executing the plan announced at the end of October: to raise $42 billion over the next three years to buy Bitcoin. They are now accelerating this execution. At this rate, the purchase volume in 2025 will likely exceed this year's.

How great is the potential of pension funds?
Now let's talk about pension funds; many people underestimate their potential. According to SEC data, pension funds currently account for less than 1% of the newly launched Bitcoin ETFs, which is indeed very low. But the issue is that after Trump took office, regulatory policies are likely to relax, significantly lowering the barriers for traditional financial institutions to enter the cryptocurrency space. The total scale of U.S. pension funds is $40 trillion, and even if only a small portion of that funds flows into the Bitcoin market, just think about how high the price could be pushed up.

Next, the market will become an institutional relay race: on one side, large institutions and companies like MicroStrategy are continuously increasing their stakes; on the other side, massive funds like pension funds are starting to enter the market. Given the current trends and policy environment, it is not impossible for Bitcoin to reach a new price peak in 2025. So, friends, if you are paying attention to Bitcoin, make sure to keep a close eye on institutional actions during this period. Because their decisions are likely defining the future trend of Bitcoin. #养老基金 #比特币

Source: Bloomberg

【FOMC meeting interpretation】

If we divide the FOMC meeting last week into three parts: interest rate decision, dot plot and press conference: First, the federal interest rate was unexpectedly cut by 50bp in the first round of the so-called "preventive rate cut", and the short-term sentiment of risky assets has remained good due to this dovish rate cut. But in fact, the dot plot is slightly hawkish. The reason for this is that it shows that there will be four rate cuts by the end of the year, a total of 100bp, which means that there will only be two more 25 cuts this year, and the room and frequency of rate cuts are limited. In addition, it is expected that there will be only four rate cuts in 2025, and interest rates will remain at about 3% in the next few years. Even if it enters a rate cut cycle, as long as the policy operates normally, the Federal Reserve will still use the neutral interest rate as a reference and maintain interest rates near it. This is its usual operating path, which does not meet the expectations of most people for zero interest rates and large-scale water release. In fact, we have seen that after the rate cut, the US dollar index and US Treasury yields, which are directly related to interest rates, have even rebounded. They have been priced in for rate cuts in advance, and now they are facing the lack of imagination of the negative impact and the subsequent rate cuts.
The rise of risky assets such as US stocks and cryptocurrencies certainly cannot rule out the positive stimulus of a sharp interest rate cut, but more importantly, the soft landing guidance in Bao's speech. The nearly one-hour press conference can be summarized in one sentence: "The US economy will achieve a soft landing." On the interest rate cut day, a 50bp interest rate cut (a sharp interest rate cut) achieved a 25bp effect (recession concerns did not rise). From a personal perspective, the current market's expectations for a soft landing are the strongest this year. The expectation of a soft landing will not only increase the risk appetite of the US market, but also help listed companies expand production and increase valuations, which is directly beneficial to the numerator of US stocks, and interest rate sensitive assets/lagging assets such as the RMB and Bitcoin will also rise accordingly.
At present, we should maintain the minimum respect for the soft landing expectations, and it is not appropriate to touch the left side. Against the background of poor overall US dollar liquidity, 67k-70k are more cost-effective opportunities to open an empty net, and a large volume breakthrough of 70,000 is a signal to leave the market. In addition, the first employment data after the interest rate cut will be released in early October. If it supports a soft landing, it will support risky assets; but if it deteriorates further, the recent soft landing trading logic will be broken and the success rate of short opening will be higher.#鲍威尔

【YouTube Market Analysis】

Bitcoin price today is around $49,000, and the overall daily level is still in a bearish trend. Yesterday's rebound high of 61,000 is worth paying attention to. If it rises above 61,000 again, the current short-term bearish trend may end.

YouTube Macro Section - Discussion on September Rate Cut

1. A 25 basis point rate cut in September is a high probability event, unless the external situation worsens, a 50 basis point rate cut is possible.

2. There are currently two situations: preventive rate cuts and recessionary rate cuts. According to Bao's current expectation management, the probability of a preventive rate cut is higher, which means that the decline in Bitcoin after the rate cut may not be too deep. However, it is not ruled out that the situation will deteriorate in the middle, so the price will fall sharply. #降息预期 #比特币走势分析

[Important Interpretation of ETFs]

Bitcoin ETFs received an inflow of $64.8 million, while Ethereum ETFs saw an outflow of $800,000. ETHE's holdings have decreased by 30% in the past month. Powell will speak at the Jackson Hole conference tonight. Last night, stocks and bonds fell across the board, but Bitcoin was relatively strong. Investors remained on the sidelines, and the situation of capital accumulation has changed. If the rate cut is finalized, we can expect a rebound in Bitcoin. #杰克逊霍尔年会  #ETF✅