Master Chat Hotspot:
Due to health reasons, I have been absent for a few days. Recently, friends in the membership channel who were supposed to increase their positions in contract trading have done so, but we have also experienced a significant pullback after breaking the previous high. The market price dropped from the highest point of 73881 to around 64000, with a decline of over 10%. Comparing this to the market in 2020, we can see that there was not such a deep pullback at that time.
Back then, after continuous price increases from 19800 to 41950 over nearly a month, a deep pullback occurred. Therefore, it can be said that this market situation is not a complete replication of history. This unexpected situation reminds us to always maintain sufficient respect for the market and not to take things for granted. We should be able to maintain a calm mindset in this market situation.
At the same time, blindly opening long positions based on the assumption that the overall trend is upward is not advisable. It should be noted that the market price is already relatively high. As I mentioned in a previous video, with more price increases, the risks also increase. The profits it brings are already sufficient, so there is really no need to continue trading with a gambler's mindset, relying on luck.
Next, I have considered the reasons for this recent decline. First, let's talk about the logical inducement. After breaking the new high, there has not been a decent pullback, and many profitable funds have a need for turnover. Market makers can also take advantage of this adjustment to continue to increase their positions, which justifies and necessitates the pullback.
Secondly, there are external factors, one of which is related to funds. This mainly depends on the inflow situation of ETFs, which I think is quite important. Before BlackRock announced the inflow situation last week, the market was quite panicked. This was because Grayscale had already announced a reduction in positions and transferred 3700 bitcoins worth about $257 million to Coinbase. Additionally, the main force behind the increase, Fidelity's FBTC, only had an inflow of $14 million last Thursday, and other smaller ETFs were also struggling. Several of them had no inflows, which also meant that BlackRock's IBIT had to have an inflow of over $222 million to maintain an overall net inflow status.
The coin price plummeted under this atmosphere of panic and uncertainty last week, as the net inflow of funds was basically maintained every day since the spot ETF was approved. If BlackRock had also not performed well, market confidence would definitely have been severely hit.
However, BlackRock subsequently announced that the inflow was $345 million. Although it was lower than before, it still brought the overall ETF back to a net inflow status. The net inflow of funds was $132 million, but this amount was still too small, and the coin price quickly began to decline again.
The second external factor is related to the SEC. Last week, Democratic D members sent a letter to the SEC chairman requesting the SEC to ensure that market makers provide investors with information disclosure about Bitcoin spot ETFs and urged the SEC not to approve other cryptocurrency spot ETFs. They also criticized the weaknesses of Bitcoin and strongly opposed the approval of ETH or other cryptocurrency ETFs.
It is said that these two Democratic D members had been opposing Bitcoin ETFs since the vote, but they compromised at the time because the pressure on the SEC chairman was too great. It can be said that the approval or rejection of cryptocurrency ETFs has now escalated to a level of debate, as it is said that one-fifth of American voters are cryptocurrency users.
From the perspective of the Democratic D's attack on cryptocurrencies, it seems that cryptocurrency users are not their target audience. Of course, at present, supporters of cryptocurrency ETFs are still quite united. Coinbase's legal counsel bluntly stated that if Ethereum's ETF is not approved, then the SEC should be prepared to be sued.
Master's Trend Analysis:
The short-term support level for the overall market is around 66000. Today, we can first look at the rebound in the smaller time frame. In other words, we need to see if the short-term resistance level can stabilize around 70000 in the recent three days, which is the key short-term resistance position. Only by stabilizing around 70000 can we open up the space above to once again challenge a new historical high.
As I mentioned in the video analysis earlier, we need to have a phased pullback in the short-term range of 76000-80000. Of course, I hope that the current stage can proceed with oscillation, which is the best scenario.
Compared to the overall market, ETH is currently showing weakness, and the entire series is in a weak market. If this pullback can lead to a small rebound in the v phase, then the potential for ETH to rise will begin, with the initial target being around 3800. After opening up the space, we will look at the range of 4200-4500. The short-term support level to focus on is in the range of 3460-3500.
3.18 Master's Short-term Pre-set Orders
BTC Trading Suggestions:
Long position near 67000-67400, defend at 400, target 68300-68600
ETH Trading Suggestions:
Long position near 3540-3580, defend at 40, target 3650-3690
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Candlesticks are king, trends are emperor. I am Master Chen, focusing on BTC and ETH spot contracts for many years. There is no 100% method, only 100% trend following. I update macro analysis articles and technical analysis review videos daily across the web! Image Friendly reminder: This article is only written by Master Chen on the official WeChat account (as shown in the image). Any other advertisements at the end of the article and in the comments are not related to me! Please be cautious in distinguishing between true and false. Thank you for reading.
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