Yesterday, Bitcoin hit $70,000 and then fell back to the current $68,000, while Ethereum also hit $3,977 and then fell back. The overall market sentiment is obviously optimistic, and local concepts have also been released. In addition to the Meme sector, Binance's new coins, led by "NOT", have also risen to varying degrees, indicating that the market has gradually entered a precursor of opportunities.
From a macro logic point of view, there are usually relatively certain trend opportunities before the general election. Although interest rate cuts may be repeated, the result is inevitable. Europe may start to cut interest rates around June, which is a positive factor for the global capital market because it will increase liquidity. Therefore, a bull market is inevitable.
In the short term, we need to find some new good opportunities. The current market liquidity is not enough to fully support it, so it is mainly a rotation between sectors. When funds flow into the Meme sector, other sectors may need to wait for signals. But once Ethereum starts to take off, the alt market will be more optimistic. Therefore, I think the alt season will not be far away.
The market fell back this morning, and there are three main reasons for this.
First, there was activity in the Mt. Gox coins. $500 million worth of assets, including more than 8,000 BTC, were withdrawn from the Mt. Gox wallet to unknown wallets. This sparked market concerns that a black swan event might occur. This is a disturbing situation for the billions of dollars of BTC that were paid out before October this year.
Secondly, although Bitcoin is only one step away from the high of $72,000, there are a lot of locked-in orders above. These locked-in orders cover the market in March-April this year and in 2021, and have experienced the panic caused by the plunge. Now as the price recovers, these locked-in orders may start to sell. Therefore, unless there is super good news, it may be difficult to break through $70,000. In contrast, it seems more attractive to buy Ethereum at the moment because ETH still has some good news support.
Third, big funds usually wait and see before the release of the US Personal Consumption Expenditures Price Index (PCE) data for April. They want to see whether the data is in line with expectations, so there is a high probability that the market will fluctuate before the data is released. Usually, the market is more likely to fall before the data is released.
The Mt. Gox wallet has a total of 14,200 bitcoins, worth about $10 billion. Although it seems that these assets are being collected, even if compensation starts, the market will not have too many problems. The amount of funds in the market is much greater than before, and the compensation will not be all at once, but may be carried out in installments. Therefore, even if there is a large-scale sell-off, the market will be able to digest it gradually.
The compensation of Mentougou may have a negative impact in the short term, but it is beneficial in the long run. The short-term decline will not change the fundamentals of the market trend, and the second half of the year is still expected to usher in a violent bull market. At present, we need to focus on the support position of $66,000. If it falls to this position again at the 4-hour level, it may enter a mode of falling to verify support in the short term.
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