We are always chasing the distant scenery, yet often overlook the flowers blooming at our feet. Those obstacles we once thought insurmountable, in hindsight, are merely steps of growth; life is never a multiple-choice question, there are no absolute rights or wrongs, only different choices. Don't panic, time will arrange the best for you ahead, don't stop, every step you take brings you closer to clarity in your heart.
In recent days, there have been fewer article updates because I have other matters to handle, and the recent market conditions have also been a bit strange, possibly due to the upcoming interest rate decision, which has made the market more cautious. Today, let's first discuss the Federal Reserve's interest rate decision. A rate cut is certain this time, but the key point is how many basis points it will be cut by. Since this is the first rate cut of the year, it won't be a large-scale easing; the market expects a cut of 25 basis points, while some expect a cut of 50 basis points. Looking at it separately, a 25 basis point cut aligns with market expectations, and the market may exhibit a "buy the fact" reaction after selling the expectation. Moreover, before the rate cut, Bitcoin has already seen some upward movement, reflecting some of the anticipated rate cut. Therefore, once the rate cut is confirmed, the market may react in the opposite direction due to the expectations. Historical trends have shown similar patterns multiple times. Thus, if the Federal Reserve's interest rate decision announced in the early morning aligns with the expected 25 basis point cut, we might see a bullish market followed by a decline. Initially, there may be a rise due to the rate cut, followed by a space for decline. Whether this will change the mid-term trend and lead to a significant adjustment will depend on the strength of the movement. If an unexpected and low-probability 50 basis point cut occurs, then we can expect a strong bullish market.
Returning to today's market, as per usual, let's first look at the distribution of liquidity. From the current distribution, both long and short liquidity have formed significant accumulations in the short term. The short liquidity is mainly located around 118,000, followed by short liquidation at 119,200. On the downside, the short-term long liquidity is primarily around 115,400, with further liquidation at 113,800. In terms of quantity, the distribution of long liquidity on the downside is broader, and the liquidation intensity is roughly similar for both sides. Historically, when both long and short liquidity have formed significant strength, there is a high probability that the subsequent market will complete a full liquidation process. Coupled with upcoming news impacts, we should expect to see significant market volatility. Regarding the spot premium index, the recent premium rate has maintained a positive premium, and compared to previous increases, the positive premium has rebounded. The market still has high expectations for the rate cut, and since recent inflows are not from new capital entering the market, we believe that leveraging the rate cut to stimulate the market is very appropriate.
On the technical side, after forming a top divergence on the weekly chart, there have been two consecutive rebound cycles. Looking at the previous trends, it is evident that this adjustment is very unreasonable and lacks sufficient strength. Based on the current trend, if the market subsequently experiences a strong rise that allows MACD to re-enter a bullish cycle, it is highly likely that a continuous divergence will occur, and the adjustments faced after that will be even larger. Currently, the pullback has not ended; according to previous expectations, as long as the upcoming rebound is not very strong, this top divergence cycle may continue to adjust, and for the current adjustment, it remains unchanged, being lower than the previous pullback cycle's low.
On the daily level, there is a clear rebound trend, rebounding from around the low of 107,200. Currently, MACD is in a bullish cycle, and it can be seen that the market has been in a bullish cycle for a long time, showing signs of a top and a pullback within the cycle. Regarding this daily cycle judgment, I personally believe that the duration of the rebound from the daily chart will not be too long. Combined with the analysis of the interest rate decision, we further believe that after the interest rate decision, the market will show a rebound followed by a pullback. On the four-hour chart, with the rise, the market is currently in the early stage of just entering a bullish cycle, and the highs have been consistently increasing. Therefore, we expect the rebound to continue until it reaches the high point of the bullish cycle, after which a pullback will occur. In another scenario, if the market does not continue to rise, it will likely be a short-term pattern of falling first and then rising, continuing the upward trend of the four-hour cycle's highs.
In terms of operations, in the short term, we consider choosing to short above 118,500. If the expected pattern of rising first and then falling occurs, we will consider a short position around 115,000. With the influence of the interest rate decision, we will look at the announcement and actual trends for our operations.
[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 discussions on the market.]
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