"Jiang Feng Trading Strategy Diary" Issue 38

I have been away on a trip for the past couple of days and didn't keep an eye on the markets. As soon as I got back, I found out that the market had quietly stolen my house.

The short position set up around BTC 79,300–80,500 in Issue 37 ultimately hit the stop loss around 80,800. I originally planned to wait for a market pullback, but instead, the market directly gave a backstab, and the short position was stopped out. Subsequently, BTC surged to as high as 82,282.

As for ETH, the short position in the vicinity of 2,485–2,565 has not yet triggered a stop loss and remains in a floating loss state, so continue to hold.

This is trading; if the direction is wrong, acknowledge it, and if the stop loss hits, just leave. The market doesn’t show mercy, and you can’t reason with it.

1. Why did it suddenly surge last night?

This round of increases was not without reason. The U.S. initial jobless claims released last night amounted to 206,000, slightly above the market expectation of about 205,000, indicating a certain cooling of the job market.

At the same time, Federal Reserve Governor Waller released relatively dovish signals, stating that if the upcoming inflation data continues to improve, he tends to maintain interest rates at the September meeting; however, if inflation rises again, he does not rule out supporting an interest rate hike.

This contrasts sharply with the market’s previous concerns about a rate hike in September. After Waller's comments, the market pricing for a September rate hike significantly retreated, and both the dollar and U.S. Treasury yields weakened, causing risk assets to rebound rapidly, with BTC rising from around 77,000 all the way to above 82,000.

But it's important to note that Waller did not announce a shift to easing by the Federal Reserve. His core logic remains "data-driven"; if inflation continues to cool, interest rates may stay unchanged in September; however, if inflation heats up again, rate hikes remain a possibility.

Therefore, the market is not trading based on the Fed having turned dovish but rather on the temporary reduction in concerns about a September rate hike. These are entirely different concepts.

2. Tonight's real test: U.S. non-farm payroll data

Tonight at 20:30, the U.S. August non-farm payroll data will be officially released.

The market currently expects a non-farm payroll increase of 56,000. The prior ADP employment data has shown a clear cooling, so the importance of tonight's non-farm data is further elevated.

At present, the biggest characteristic of the market is that the Federal Reserve no longer provides forward guidance; the Federal Reserve's judgment on future policies heavily relies on economic data. Therefore, tonight's non-farm data could very well alter inflation expectations based on employment data, further influencing the Federal Reserve's policy expectations for September and driving fluctuations in the USD/USD bond and BTC, ETH.

If non-farm data is significantly weaker than expected, the market might trade further on "no rate hike in September," giving Bitcoin the opportunity to rally further.

Conversely, if non-farm data is significantly stronger than expected, especially with both employment and wages showing strength, the market may raise rate hike expectations again, leading to a rebound in the dollar and U.S. Treasury yields, putting the recent rise in BTC, driven by expectations, to the test.

So the biggest risk tonight is not direction but rather the moment of data release, where the market may first sweep stop losses and then take the true direction. Therefore, tonight I do not recommend heavily betting on data. Maintain a light position with small stop losses and wait for the market to give direction.

BTC:

From the chart, BTC has quickly risen from around 77,000 to above 82,000. The short-term increase has been significant.

Currently, the main area to watch above BTC is 82,000–82,600, which is an important short-term resistance area, with 82,800 being a crucial position in the overall bearish structure.

If BTC just shoots up to 82,000–82,600 and then experiences a pullback, there is still a shorting opportunity. However, if the 4-hour level can effectively hold above 82,800, then bears must be cautious.

If it breaks above 82,800 and confirms with a pullback, it may then touch 84,400 and 85,800, or even higher.

So, 82,800 is not just an ordinary resistance, but a position that the bears must defend heavily in this round.

BTC Trading Strategy

When rebounding near 82,000–82,600, if there is a clear obstruction to rising, a light short position can be attempted. Stop loss: 83,600, first target: 80,800, second target: 79,000, third target: 76,000.

If 76,000 falls significantly further, continue to watch the 75,000–73,000–70,000 range.

Be mindful that before and after the non-farm release tonight, heavy positions are not recommended for aggressive shorts. If the data is clearly favorable for risk assets, BTC may directly break through 82,800, and shorts may face rapid squeezing again.

ETH:

2,535–2,565 remains the observation area for short positions, with ETH currently around 2,510. BTC and ETH are now very close to the first resistance area. Pay attention to 2,535–2,565 as this is the first short-term resistance. If it breaks through here: 2,600–2,650 is the second resistance area. Further up, 2,680 is currently a very critical mid-term resistance for ETH.

ETH Trading Strategy

If rebounding near 2,535–2,565, and if there is an obstruction to rising, a light short position can be attempted. Stop loss at 2,620, first target near 2,480, second target near 2,435, third target 2,350; if it falls significantly further, continue to watch the 2,275–2,210–2,125 range.

ETH 2,680 is the last critical defense line for bears. Once it effectively holds above 2,680 in 4 hours, continuing to hold short positions would be meaningless, and corrections need to be made promptly.

After a significant rise last night, BTC and ETH have entered crucial resistance regions. Tonight coincides with the non-farm payroll. Therefore, today’s market could see two entirely different scenarios:

Scenario 1: Non-farm data is weak, employment is clearly below expectations, and the market trades on "no rate hike in September." In this case, BTC might break through 82,800 as well as 84,400 and 85,800.

ETH could potentially break through 2,565 as well as 2,600 and 2,650, even 2,680; if this happens, bears must correct their positions.

Scenario 2: Non-farm data is stronger than expected, employment is clearly better than expected, and wages are also strong. The market raises rate hike expectations again, and the dollar and U.S. Treasury yields rebound. In this case, BTC’s recent rise, driven by expectations and short-covering, might face profit-taking.

The core of today’s trading isn’t about whether “BTC will definitely rise” or “will definitely fall,” but whether it breaks bullishly above 82,800 or whether it fails to rise in the range of 82,000–82,600, leading to a bearish pullback.

If BTC holds above 82,800, bears will retreat; if ETH holds above 2,680, bears will retreat.

⚠️: Remember to maintain light positions and strict stop losses before and after tonight's non-farm data is released.

⚠️: All entry and exit points listed above might have point discrepancies: BTC ±100 points, ETH ±5 points.

⚠️: The above thoughts only represent Jiang Feng's personal views, so please take them rationally and do not blindly follow!

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