Good morning, crypto friends☀️, I am Wang Yibo! A new day, and the market trends in the crypto world continue to affect every investor's heart. Loyal fans remember to check in👍, and those who like this will surely make a fortune this year🍗🍗🌹🌹. Currently, the global macroeconomic dynamics are increasingly intertwined with the crypto market, and grasping these key pieces of information is essential to finding the best trading opportunities in this rapidly changing market.
【Macroeconomic Changes, Fed Rate Cut Expectations Become the Focus】
The closing situation of the US stock market on Wednesday showed some divergence, with the Dow Jones down 0.48%, the S&P 500 index up 0.3%, and the Nasdaq slightly up. In terms of individual stocks, Apple fell over 3%, while Oracle surged, aiming for a market value of one trillion dollars. This divergence in the market reflects the differing judgments on the prospects of various industries.
More critically, the PPI for August, released last night, unexpectedly plummeted, acting like a heavy bomb that significantly changed market expectations for the Fed's monetary policy, potentially forcing the Fed to cut rates urgently! According to CME's "FedWatch": the probability of a 25 basis point rate cut in September is 92%, while the probability of a 50 basis point cut is 8%; the cumulative probability of a 25 basis point cut in October is 21.2%, a cumulative 50 basis point cut is 72.6%, and a cumulative 75 basis point cut is 6.2%. Such a high probability of rate cuts undoubtedly injects a strong dose of confidence into the market, and the preference for risk assets may rise accordingly.
Data from the US Bureau of Labor Statistics has further intensified market concerns. In the 12 months ending March this year, non-farm employment increased by 911,000 less than expected (an average of 76,000 less per month), marking the largest downward revision in over 20 years. Additionally, only 22,000 jobs were added in August, and 13,000 were lost in June, all confirming that the labor market is far weaker than initially estimated, leading to a surge in market panic.
The Fed bears primary responsibility for this round of panic. Its missteps in inflation decisions are particularly notable: when inflation reached 5% in 2021, it insisted on the "transitory" narrative and continued to inject liquidity, fueling soaring prices; from 2022 to 2023, it raised rates 11 times in a row (a total of 525 basis points), which, while reducing inflation to 3%, severely impacted the economy and employment; and now, fearing a rebound in inflation, it hesitates to cut rates, missing the best opportunity for adjustment.
Political factors have also distorted the Fed's independence. Powell has been wavering between "fighting inflation" and "protecting employment," clearly short-sighted due to public opinion pressure. Moreover, the Fed is dominated by the Democratic Party, and its policies carry an anti-Trump tint, deviating from the principle of "independent decision-making," which undoubtedly exacerbates global economic uncertainty.
This "sitting on the fence" strategy has left the Fed in a precarious position: inflation exceeds the 2% target and poses a rebound risk, while the employment market has substantially deteriorated. Even if the market expects rate cuts starting in September (with a potential total cut of 75 basis points this year), the impact of previous decision-making errors has already run deep. The core CPI for August, to be released tonight (expected year-on-year at 3.1%), adds another test for the market. The US economy is sliding into recession, and the Fed's decision-making errors and indecision are the main reasons for this crisis, which will continue to impact global markets, making it difficult for the crypto market to remain unaffected.
【Crypto Market Shows Mixed Trends, Sector Rotation and Hotspots Diverging】
In this macro backdrop, the crypto market is showing mixed trends, with frequent sector rotations and diverging hotspots. However, it is worth noting that both Bitcoin and Ethereum have rebounded and reached key positions, bringing a glimmer of hope to the market. At this moment, we must focus on these macro dynamics and pay attention to Yibo to timely grasp real-time information, respond to market changes, and seek potential investment opportunities.
【Bitcoin Market Analysis: Fluctuating Upward, Breaking Key Levels is Crucial】
Bitcoin's market started with a low of $110,736 and began a fluctuating upward trend, accelerating in the evening to quickly reach a high of $114,250, before facing pressure and retreating into a fluctuating range.
From a technical perspective, the 4-hour Bollinger Bands indicator shows that the price is above the middle band and close to the upper band. This position is critical; if it can effectively break through the upper band, it indicates strong short-term bullish momentum, and the upward trend is likely to continue towards higher price levels. If it encounters resistance and falls back near the upper band, it may fluctuate between the middle band at $112,000 and the upper band, waiting for a new directional choice.
Future layouts need to focus on the strength of the breakout at the Bollinger Bands upper band of $114,200. If it breaks through and stabilizes, the upward space will further open up; if it fails to break through the upper band, the effectiveness of the support at the middle band of $112,000 needs to be observed. If it falls below the middle band, it may shift to a fluctuating or corrective market in the short term.
【Ethereum Market Analysis: Highs Followed by Pullbacks, Caution Required in High-Range Fluctuations】
Ethereum faced pressure at yesterday's intraday high near $4,450, dropping to a low of around $4,298, showing an overall trend of rising and then pulling back.
From the current market perspective, after a short-term increase in volume, the high-range consolidation has not further broken higher, but there has also been no significant pullback. The strong performance remains intact. Although the performance is still strong, short-term indicators have entered a divergence area, indicating a need for adjustment. With the previous continuous increase in volume, the current sideways movement is not an ideal state, and volume increases can easily lead to a top. After a surge in volume at the tail end, it is advisable not to chase after highs.
The current rhythm may still be accompanied by repeated high-range washouts, and the trend may instinctively reach new highs before pulling back, which poses a significant test for investors' on-the-spot response capabilities. In terms of operations, arrangements should be made based on the shape, and after a rise, short positions can be considered.
In summary, the current crypto market is at a critical juncture influenced by the interplay of macroeconomic and technical factors. Investors need to remain highly vigilant, closely monitor the release of macro data and changes in market conditions, and seize potential investment opportunities while controlling risks.
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