The greatest trouble for a person is having too good a memory. If one could forget everything, every day would be a new beginning. In the past, when we saw a mountain, we wanted to know what was behind it; now we no longer care. Everything that has passed is merely a prologue; let the past be the past. Getting what you wish for is a fairy tale; having things go against your wishes is life.
Another week has passed. Since the update last Friday, there have been some changes in the market over the past few days. First, on Friday evening, due to Powell's speech, he "joined" the dovish camp, opening the door for a rate cut by the Federal Reserve in September, leading traders to increase their bets on a rate cut. According to CME's "FedWatch": the probability of the Federal Reserve maintaining interest rates in September is 12.7%, while the probability of a 25 basis point cut is 87.3%. The market reacted strongly to this news, with a significant surge in the evening, reaching a high of over 117,000. Powell's initial signal of a rate cut expectation stimulated the market, resulting in this short-term rally. However, this news-driven rally was clearly not sustainable, and over the weekend, the market generally experienced weak fluctuations. Then, early this morning, the market dipped again, refreshing the low to around 110,600, which aligns with our expected retracement point from Friday. Overall, the market movement is not much different from last week; after digesting the short-term surge, it has returned to its old pattern. In terms of operations, due to Friday's surge, our planned short position at a high was forced to stop loss, but the subsequent weekend decline allowed us to regain some profits from shorting. Additionally, we entered a long position at the lower pin, following our plan to buy at 110,700, which also yielded a rebound from an oversold condition, so overall, the operations were satisfactory.
Returning to today's market, the first step is to observe the distribution of liquidity. Since there was significant volatility in the early morning, the liquidity situation has changed considerably. In the short term, the downward pin has cleared a large number of long positions that were originally concentrated below, making the current short-term liquidity distribution show a more concentrated bearish sentiment above. It is important to note that after the early morning pin and the subsequent oversold rebound, longs have re-entered the market and started accumulating high-leverage long liquidity around 111,000. It is evident that some stubborn longs are actively participating, while the remaining long liquidity from earlier is now around 109,800. The short-term high-leverage short liquidity is around 114,000, and there is also a significant amount of short liquidity accumulating at higher levels around 116,000. Additionally, from the spot market's premium rate, it is clear that the recent weak market is primarily due to a large amount of selling in the spot market. Currently, the spot premium rate has remained in negative territory, with the Bitcoin market facing significant selling pressure from ancient holdings. Recently, ETH has performed strongly, continuously setting new historical highs, with some selling pressure from BTC directly exchanged for ETH. Meanwhile, in the ETF market, there has been continuous outflow, which explains why Bitcoin has been so weak recently.
From a technical perspective, as we enter a new week, the key focus is on the weekly chart. From the candlestick perspective, there have been two consecutive weeks of bearish closes. Last week, we mentioned a bearish candlestick with an upper shadow at a high, and with the subsequent bearish close, this indicates a clear weak market structure. Currently, the weekly MA7 line is turning downward, and the price is below the MA7 line, reflecting a weak market structure. Moreover, on the technical indicators, MACD has entered a bearish cycle. Unless there is an exceptionally strong bullish trend to counterattack, the weekly death cross and secondary top divergence are inevitable. Additionally, RSI is also at a relatively high position, making it difficult to predict how much strength will be exerted once the expected top divergence on the weekly chart begins to materialize.
On the daily chart, there isn't much to say structurally; it is similar to what we discussed last week. Currently, we have two consecutive bearish candlesticks, and the price remains below the MA7 line, indicating a weak market. The current trend support is around 109,500. If there are no surprises, it is highly likely that the price will test this support level, and we will observe the market's movement after the support test.
On the four-hour chart, the market continues to explore the bottom and has refreshed the cycle low again. From the rebound situation after the bottoming process, the price has risen nearly 3,000 points, but currently, the sustainability is relatively poor, and the closing candlestick is not strong, indicating that buying power is still insufficient. Additionally, the premium has not turned positive, and there is still a lack of significant capital for bottom fishing, suggesting that the market's attractiveness at this position is low, which also sets the expectation for creating even lower positions. Based on the current market structure, if we refresh the lows again, we need to consider the current ideal support at 109,500. In terms of technical indicators, MACD has again entered a bearish cycle, and we have not yet seen any signals of a trend reversal at the bottom. Meanwhile, RSI is already at a relatively low level, so if there is another decline, it will likely enter the oversold area, providing an opportunity for a short-term rebound.
In terms of operations, based on the analysis above, we should still lean towards a bearish stance. For shorting, the 114,000 level is more suitable in the short term, as there is still considerable liquidity here. It would be more appropriate to clear this level after a slight rebound before proceeding with a downward move. For entering long positions to bet on a rebound, the most ideal scenario is to wait for a test of support around 109,500. If there is a significant amount of new liquidity during the daytime's consolidation, we can consider a more aggressive layout, and then arrange according to the market movement.
Ethereum is currently the focus of the market, showing continuous strength. However, the continuous new highs have not driven altcoins to surge. From an operational perspective, Ethereum is currently not easy to trade in the short term due to high volatility; we can only wait for better opportunities to buy some spot and hold.
【The above analysis and strategies are for reference only. Please bear the risks yourself. The article is subject to review and publication, and market conditions change in real-time. The information may be outdated, and strategies may not be timely. Specific operations should be based on real-time strategies. Feel free to contact us for market discussions.】
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