Master Discusses Hot Topics:
On Monday, I opened my eyes to see that Bitcoin has once again taken a hit. The weekly and monthly charts have all collapsed, and the bullish sentiment that was built up over the past ten days was completely reversed in just one morning.
Looking at the macroeconomic situation, the Bank of Japan's governor suddenly turned hawkish, raising interest rate expectations, and U.S. stock index futures also took a nosedive, naturally scaring the market.
With the interest rate hike from Japan, if the USD/JPY carry trade gets overturned, global liquidity will tighten, something I've mentioned countless times before.
However, this wave of decline wasn't caused by some sudden black swan event crashing the market, but rather due to the monthly chart failing to break through at the end of November, leading to a concentrated automatic delivery explosion. Coupled with the fact that U.S. market makers are on holiday, the market depth has been hollowed out, and even a slight selling pressure can create a catastrophic effect.
December is also the last month for interest rate cuts this year, and from December to February next year, we will enter a pause period for rate cuts. During this time, the market will only have one direction, which is still bearish.
Moreover, if Japan really does raise interest rates, that will be the focal point of this global sell-off. Don't doubt it; if the market gets flipped from December to January, that would be the biggest black swan. The long positions piled up above are waiting to be pierced, at least 90% of them.
This week's data is also quite stimulating, with Wednesday's ADP non-farm payrolls. The worse this data is, the more favorable it is for interest rate cuts. But the worse the economy gets, the more it resembles a funeral being celebrated. Thursday's Challenger job cuts follow the same logic; the more layoffs there are, the happier the Federal Reserve will be.
Friday's PCE data is already of little significance, but if it comes in lower, it can still be seen as a warm cup of water for the market. Next week, there will be PMI data, and old Powell will attend an event to speak, but the Federal Reserve has entered a quiet period, so he can't discuss monetary policy; it's purely for show.
The key point is that I have been saying for the past two weeks that the rebound has ended and we are heading into a bear market, and now isn't it crashing right in the faces of those small bulls? Those who have been shouting bullish all day are probably starting to find excuses again, right? There is too much noise in the market; the more you don't believe it, the safer you are.
Returning to the market, I currently see another significant drop around December 4th; this morning's wave doesn't count in that. History is lazy to hide itself; on December 3, 2021, Bitcoin experienced a rapid drop overnight, so it wouldn't be surprising if something similar happens from the 1st to the 5th of this month.
Bitcoin's weekly support is at 74.6K, and this range will eventually be tested repeatedly. On the daily chart, it is in a volatile pattern; as of the time I wrote this analysis, Bitcoin has already broken 86.8K. If it goes lower, I can only look directly at 82K or even 80K.
Speaking of which, if I were the main player, I wouldn't be accumulating at such a garbage level of 86.8K. The rebound is effortless, and after today, if you want to see Bitcoin above 94K or Ethereum above 3200 this year, sorry, you probably won't get to see it.
Currently, Bitcoin is first looking at 85.3K; if it breaks below, it will head straight for 80K or even a new low. For Ethereum, 2803 is the first point of interest; if it breaks, wait for a distance correction to 2620 or even a new low.
2723 can be a short-term long, but it might hit 2712 or get thrown to 2688. If you insist on bottom-fishing in the short term, a slightly suitable bottom-fishing point is at 2620, with a stop loss at 2500; if it breaks that, then just look at 2112.
Resistance Levels Reference:
Second Resistance Level: 90200
First Resistance Level: 87500
Support Levels Reference:
First Support Level: 84500
Second Support Level: 80600
Bitcoin started December with a big bearish candle, directly reversing all the gains from last week. It even retraced to the previous low of 84.5K, which is the most important support for this week.
If 84.5K is lost again, the decline will continue to accelerate. Currently, it is a typical long bearish candle structure; if there is no lower shadow line for buffering or a strong bullish candle that can engulf the previous bearish candle, the probability of continuing to drop is extremely high.
The market currently shows no signs of recovery; if buying pressure doesn't come in, don't expect a rebound. For a technical rebound, at least a pullback to 87.5K is needed to catch a breath. The RSI is at 33, not yet fully oversold. There is still space below, and the probability of continuing to move down in the short term remains.
The first support, the closing low of 84.5K, is a key defense line; this is a typical position to look at the risk-reward ratio. Once it breaks, the market will likely head straight for the previous low trading area, which is the second support at 80.6K.
The first resistance at 87.5K is a must-reclaim position in the short term; if it doesn't hold above this level, the trend will still be dominated by bears. If it breaks above, we will see if the pullback can turn into support, which is key for subsequent rebounds.
12.1 Master’s Wave Strategy:
Long Entry Reference: Not currently applicable
Short Entry Reference: Short in the 87000-87500 range, Target: 86000-84500
If you truly want to learn something from a blogger, you need to keep following them, rather than making hasty conclusions after just a few market observations. This market is filled with performers; today they screenshot long positions, and tomorrow they summarize short positions, making it seem like they "catch the top and bottom every time," but in reality, it's all hindsight. A truly worthy blogger will have a trading logic that is consistent, coherent, and withstands scrutiny, rather than jumping in only when the market moves. Don't be blinded by flashy data and out-of-context screenshots; long-term observation and deep understanding are necessary to discern who is a thinker and who is a dreamer!
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