文：Old Li Mortar

Review: Before the interest rate decision was announced on TG yesterday, it is highly probable that the market will continue to maintain a weak and volatile trend. The lower support level can be referenced near the Fibonacci 38.2% retracement position of the current uptrend, which is around $66,100. This is considered a resonant support area, and if held, a rebound is expected. After the market actually dropped to near $66,050, it rebounded in the early morning to near $68,000, which aligns with the short-term support level and overall trend as predicted.

Macro Interpretation:

1. Tonight at 8:30 PM UTC+8, the US CPI annual rate and monthly rate will be announced.
2. At 2:00 AM UTC+8, the US Federal Reserve interest rate decision will be made, followed by Powell's monetary policy press conference and speech at 2:30 AM.

Today, let's discuss the recent US economic data and the performance of the US stock market, and whether it will affect tonight's US Federal Reserve interest rate level and expectations, as well as whether it will have an impact on the cryptocurrency market.

Although the US economic data has appeared somewhat weak since the end of May, the unexpectedly strong non-farm payroll data released last Friday, far exceeding market expectations, has dampened investors' expectations of a rate cut in September.

The market's attention has now turned to tonight's inflation data and the Federal Reserve's interest rate meeting. The overall sharp drop in oil prices in the previous period is expected to cool down the May CPI data, and inflation pressure may ease. In this context, the Federal Reserve is likely to adjust its guidance for the year's rate cuts to be closer to the market's expected two cuts. The possibility of a rate cut in July has been greatly reduced, and the market is more focused on the interest rate meeting in September.

At the same time, the European Central Bank announced a 25 basis point rate cut last week, in line with market expectations. However, it has given a vague "hawkish" attitude, indicating that no specific rate path will be committed to in advance. In the current uncertain inflation outlook, the ECB's dynamic adjustments also have a certain degree of uncertainty.

In the foreign exchange and interest rate markets, it is expected that the Federal Reserve's interest rate meeting this week will not bring much new information. For a period of time, traders may choose a range trading strategy, and both the US dollar index and the euro may maintain a moderate upward trend. The key driver of the upward movement of the US dollar index may be the significant decline in the Japanese yen.

Therefore, we believe that the recovery of the US economy has once again been recognized by the market, especially the strong performance of non-farm payroll data, which has brought positive signals to the market. However, inflation data and the Federal Reserve's actions are still the focus of the market. The ECB's vague guidance reflects its uncertainty about the current inflation outlook, and the performance of the foreign exchange market is also influenced by a variety of currencies.

Data Analysis:

Today, there is an interesting piece of data to share with everyone: these two charts show the changes in the scale of stablecoins and the market liquidity ratio, as well as the price trend of BTC. We have been seeing stablecoins increasing, and the market value of stablecoins, led by USDT, is also growing. However, the liquidity ratio of BTC trading pairs is decreasing. This is understandable, as the dominance of the US dollar fiat market is increasing, and the proportion of liquidity represented by stablecoins in the global offshore market is decreasing. In our early impression, for example, in 2018-2019, USDT once accounted for over 95% of the trading volume of BTC trading pairs.

According to CryptoQuant data, Coinbase holds a 46% share in the global BTC/USD spot market and its influence is continuously increasing. This may be driven by institutional brokerage services before and after the approval and implementation of spot ETFs. The increase in the size of the ETF can also be seen. Secondly, the Korean won is the second largest trading volume currency, but it is mainly for altcoins. Last month, 82% of the trading volume on Upbit came from altcoins. In addition, the BTC/USD trading pair on Coinbase has five times the trading volume of the BTC/Korean won fiat trading pair on Upbit. Overall, as the dominance and liquidity of BTC in the US dollar fiat market continue to increase, the pricing of the coin will be more dependent on the US market and a series of economic data, and the main period of volatility will also be dominated by the US trading session. At that time, we need to pay more attention to the dynamics and macro data and policies of the United States.

Technical Analysis:

1. Looking at the BTC weekly K-line chart, the closing lines of the first three weeks all have slightly longer upper shadows, and the overall magnitude is relatively equal to the K-line entity. This also indicates that there has been a period of equilibrium between long and short positions in the past few weeks, without showing a strong trend. Although the bulls were relatively strong in the early stage, combined with the temporary neutral status of this week, it is expected to continue the recent weak and volatile trend. The high-level death cross of the MACD since the end of April is still ongoing. Although the momentum bar has slowed down, it has not changed the cross status of the fast and slow lines. Therefore, until the coin price breaks out of a strong bullish trend and reaches a new high, the death cross will probably be maintained for a long time.

2. Looking at the daily chart, the current market retracement is also a second test of the neckline of the previous head and shoulders pattern. Generally speaking, if the first test is successful and there is a rapid and strong rebound with a high degree of similarity in the pattern, it proves to be a successful head and shoulders pattern and a new high is reached. However, the current situation is that after the first test, there was no significant rally, and a second test of the neckline occurred, indicating that the bullish confidence is insufficient, and speculative buying pressure has led to profit-taking. Therefore, the probability of a strong rally after the second test and the similarity in magnitude with the pattern will also decrease. In simple terms, the probability of completing a standard head and shoulders pattern is decreasing. Of course, this is largely due to the fact that the head and shoulders pattern at the daily level appeared at the historical high of BTC, rather than at the bottom of a large cycle.

3. On the four-hour chart, let's first look at the recent trend of BTC. After testing the resistance near $72,000 twice in the current uptrend, there was a pressure-induced pullback, indicating that there is some selling pressure above. This can be doubly verified by the miner's selling data and the on-chain activity data of long-term holders reaching a new high. Currently, the lowest point dropped to near $66,050, which is in line with our previous prediction of the first short-term support level. This is the retracement position of the Fibonacci 38.2% since the uptrend from $56,550 to $72,000, and it is a resonant support area. Therefore, a small to medium-sized rebound as expected in our analysis has occurred. Of course, whether this is the end of the short-term decline currently needs to be comprehensively judged in combination with tonight's CPI inflation data, the Federal Reserve interest rate decision, and Powell's statement on the next steps. For now, until it breaks below, it is temporarily considered a range-bound market between $66,000 and $72,000. If it falls below $66,000, it indicates that the short-term trend will shift to bearish, and the lower support near $64,275-$64,600 may be tested, which is the accumulation point before the breakout of the head and shoulders pattern and the Fibonacci 50% retracement position of the current uptrend since early May. This level can also be considered for short-term buying.

BTC Strategy: Pay attention tonight to whether BTC can break through the lower boundary of the range since late May, around $66,000, under the support of inflation data and interest rate policy. The outcome at this key position will determine the logic of our entry on the left and right sides. Short-term rebound for shorting is the main strategy. If it falls first, pay attention to the opportunities for long positions at two support levels.

Spot: The top three strong currencies in terms of intraday gains to watch are MOB, SYN, and ELA.

Disclaimer: The strategy only represents personal subjective opinions, for reference only, and does not constitute a basis for trading. Trading based on this information is at your own risk.

Real-time data and strategy updates are available in the community.

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