- Zhou Yanling: Why did Bitcoin plummet on May 1st? What to do if long positions are trapped? The latest trend analysis and operational strategies in the coin circle
The May Day holiday has already begun, I wish everyone a happy May Day! Yanling chooses to stay at her post and not go out to join the crowds and squeeze through the crowds. However, as a person in the coin circle, I believe that friends who have positions during this May Day holiday must be very excited. Since yesterday, Bitcoin has dropped from around 64,700 to the current position of 56,500, a short period of less than two days has seen a continuous plunge of 8,000 points, and the bears have already won! Throughout the entire coin circle, everyone has been looking forward to the quadrennial Bitcoin halving, but since the halving on April 20th, its impact seems to be minimal, and it has not continued to push up the price of Bitcoin as expected, but instead has initiated a plunge. So what is the reason for this plunge? Yanling will discuss it with everyone today:
In fact, "stagflation" can be said to be an important reason for the plunge of Bitcoin this time. Everyone has always ignored the threat of "stagflation," and the weaker-than-expected U.S. GDP data indicates a slowdown in economic growth, while the high core personal consumption expenditure (PCE) index implies that inflation issues will still be a thorn in the side of the Federal Reserve (Fed). Yanling expects that the downward trend of Bitcoin's volatility may continue throughout the summer. During this period, friends in the coin circle should be cautious in judging whether the current trend is bottoming out or has already peaked. At least for now, it is certain that this big drop will not stop until it wipes out the long positions that were gained before. So, do not underestimate this major adjustment, it is not just a simple retracement of the previous uptrend. However, there is no need to be too pessimistic. Traditional financial institutions are increasingly accepting cryptocurrencies. Hong Kong has approved the listing and trading of Bitcoin and Ethereum spot ETFs, which is bound to arouse great interest from Asian institutional investors. If you still feel pessimistic, you need to know that more and more institutional investors are joining the coin circle market. According to data from the Hong Kong Stock Exchange, the launch of virtual asset spot ETFs will increase the variety of products in the Hong Kong market, providing investors with a more diverse selection and consolidating Hong Kong's position as the leading ETF market in Asia. Bloomberg Intelligence analyst Rebecca Sin also expects that cryptocurrency ETFs listed in Hong Kong may accumulate $1 billion within the next two years. So, all of the above are some reference news for the future development prospects of the coin circle. Therefore, in the face of this plunge, as long as everyone implements risk control measures in their operations and does not chase after rises and falls excessively, the most stable approach is to take profits when the opportunity arises.
From a technical perspective, looking at the daily level of Bitcoin, there have been two consecutive large bearish candles, still suppressing the upper resistance of the previous channel and the 10-day moving average, after more than a week of weak consolidation, increasing the momentum for further weak correction in the future. Furthermore, there has been a continuous waterfall-like decline yesterday and today, with the current medium bearish K-line pattern, indicating a probability of continued corrective probing, so it will soon test the 55,000 support level. With the 10-day moving average as the pressure point, the main trend today continues to be a bearish correction. At the 4-hour level, Bitcoin is currently in a continuous decline, breaking through the middle track, and with a dead cross in the MACD, there is still further downward momentum in the short term, and the downside space has been completely opened up. This decline is far from over. Faced with this bearish trend, if you want to participate, you can only make small counter-attacks and directly lay out, because it may resemble the situation in the first half of April, slowly declining step by step without showing relatively good corrections and then falling all the way.
Bitcoin operational strategy on May 1st:
- Short at 57,800-57,400, stop loss at 400 points, target 56,300-56,000, if broken, look at around 54,400
- Long at 56,100-56,400, stop loss at 400 points, target 57,100-57,600
[The above analysis and strategies are for reference only. Please bear the risks on your own. The article's review and release may have lagging strategies and lack timeliness. Please refer to Yanling's real-time strategy for specific operations.]
This article is exclusively authored and shared by senior analyst Zhou Yanling (WeChat public account: Zhou Yanling). The author has been engaged in financial market investment research for more than ten years, mainly analyzing and guiding operations in the coin circle contracts/spots such as BTC, ETH, DOT, DOGE, LTC, FIL, EOS, XRP, BCH, ETC, BSV, etc. With a solid theoretical foundation and practical experience, the author is good at combining technical and fundamental analysis, focusing on capital management and risk control, and has a stable and decisive operational style. The author's amiable and responsible character and decisive operations have been recognized by the majority of investment friends. If you need to know more about real-time investment strategies, trading techniques, operational skills, and candlestick knowledge, you can follow the teacher (WeChat public account: Zhou Yanling).
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