The continuous 8-week rise of Bitcoin has turned into a decline as the new week begins.
BTC has dropped by over 5% daily, falling to $40,500. The current price of BTC is $41,900, and its decline has led to a market-wide drop in the cryptocurrency market.
Cryptocurrency market plunges, liquidation amount exceeds 350 million USD
Although the decrease is said to be for the liquidation of long positions held by whales on the Bitmex exchange, the specific reasons for the decrease are still unclear.
On the other hand, it has been anticipated that the continuous 8-week rise and inflation of prices will undergo an adjustment at some point. While many experts believe the bear market has ended, it does not mean that prices will continue to rise indefinitely.
In a bull market, severe price declines and corrective trends can also be observed.
In fact, the recent rise in Bitcoin is not only due to the expectation of the approval of spot ETFs, as this concept has been hyped multiple times this year. In the short term, the main reason is the pause in the US dollar interest rate cycle and the expectation of the start of a US dollar interest rate cut cycle at the end of next year, as well as the short-term need for a large amount of funds to be whitewashed in a certain place, pouring into the virtual currency market, thus forming this wave of mini bull market.
Speaking of the pause in the US dollar interest rate cycle and the expectation of the start of a US dollar interest rate cut cycle at the end of next year, today's sharp drop in Bitcoin, accompanied by two other phenomena, the decline in gold and the rise in the US dollar index.
Rise in the US dollar index and decline in gold, along with the rapid decline in Bitcoin, have similarities in timing. It can be basically confirmed that the change in market expectations due to the pause in the interest rate cycle has caused the market to change.
On the news front, Nick Timiraos, a well-known journalist nicknamed the new "Fed Communication Agency" and now referred to as "Nikileaks" by Wall Street, published an important article at a critical moment when the Fed is about to make its latest interest rate decision this week.
In the article, he judged that Fed officials are unlikely to have serious discussions about when to cut interest rates this week, and may not have such discussions in the coming months unless the weakness of the economy exceeds expectations. He mentioned the history of the Fed cutting interest rates about six months after the last rate hike, as well as the significant mistakes the Fed has made in cutting rates too early.
This hawkish statement may have caused a change in market expectations, leading to panic in the cryptocurrency market. However, in the long run, Bitcoin has broken through $40,000 and has formed an upward trend, so the overall upward trend will not change. My personal strategy is to switch all contract operations to spot operations, because in the active trading market, it is difficult to predict the daily price fluctuations, and it is easy to get liquidated.
In fact, instead of focusing on the performance of Bitcoin in this wave of market, it is better to pay attention to the market of altcoins. The last time Bitcoin broke through $60,000, the entire coin circle was led by Bitcoin, and when Bitcoin stabilized at $60,000, various altcoins began to rally. The recent performance of altcoins presents two trends:
Newly launched altcoins continue to soar. When you click on the "Recent New Coins" section on Binance, you will find that the virtual currencies recently listed on the exchange have all experienced several-fold increases. A representative example is ORDl, a token established based on the BRC-20 replaceable token standard in the white paper, which has risen from $10 at the initial launch to $63; TIA, which is based on the modular blockchain concept and aims to become the best data usability layer, has also risen from $2 to $11. Almost every newly listed coin will be hyped after listing, unlike many new coins last year that went green after listing. It seems to also indicate that the virtual currency market will enter a new round of bull market.
Many virtual currencies mired in negative information have been hyped, such as FTT, the token of FTX, the former largest exchange in the United States, which is facing life imprisonment for embezzling investor funds. It has risen from $1 last month to at least $4.6 now, and FTT still has the blessing of being banned on Binance and entering the US market. However, it is not very understandable why Do Kwon, who harvested the world with Luna and USTC's double helix last year, is now harvesting with Lunc after the failure of the double helix structure. After the double helix structure failed, the number of Lunas increased by 300 million per day, and now it has reached 5.4 trillion. Do Kwon's solution afterwards was to abandon Luna and switch to Lunc, issuing new Lunas to continue harvesting.
However, in this situation, due to the short position of the new virtual currency, Lunc has increased by 4 times in a short period. The same magic has also occurred with USTC Luna. The entire market is showing unprecedented irrationality.
A large amount of hot money has recently poured into the virtual currency market, which may really be related to military actions in a certain place. So when you withdraw funds, you need to be extremely careful, after all, the freezing of cards is becoming increasingly tight, and being frozen could result in more losses than gains. With the new round of Fed memories about to begin, the impact of speech on the cryptocurrency market will intensify.
In the cryptocurrency industry, if you want to seize the opportunity of the next bull market, you need to have a high-quality circle, where everyone can huddle together and maintain insight. If you are alone and at a loss, it is actually very difficult to persist in this industry. If you want to huddle together or have doubts, you are welcome to join us - Gongzonghao: Guanguanshuibi VX: 3379276514
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