On May 7, Ethereum welcomed the highly anticipated Pectra upgrade. This upgrade is significant and introduces a series of new features, such as account abstraction through EIP-7702, allowing external accounts (EOA) to also have smart contract functionality, with wallets supporting transaction batching, Gas payment on behalf, and other practical operations, bringing numerous conveniences to users; it also optimizes the validator experience through EIP-7251, EIP-7002, and EIP-6110, enhancing the maximum balance that validators can earn rewards on, introducing withdrawals triggered by the execution layer, and eliminating delays in validator deposits; at the same time, EIP-7691 will double Ethereum's blob throughput, aiding L2 expansion. This series of upgrades is expected to propel the Ethereum ecosystem to new heights and have a profound impact on the entire cryptocurrency market landscape.
Immediately following, the Federal Reserve's interest rate meeting on May 8 becomes the market focus. The meeting primarily discusses the state of economic operations, financial market risks, and monetary policy decisions, and its results directly influence market trends.
Looking at Bitcoin again, the recent price trends are concerning. Previously, Bitcoin had a false breakout above $97,400, followed by a top divergence in the 4-hour MACD. According to technical analysis theory, a top divergence often signals that the stock price is about to reverse at a high point, indicating that the short-term rebound for Bitcoin is likely already over. The market is expected to experience several days of volatility before entering a downward adjustment phase. In terms of retracement target levels, the first target is around $93,000, and the second target is around $91,000.
The result of this interest rate meeting has a significant impact on Bitcoin's price. If the outcome is bearish, Bitcoin is likely to experience a sharp decline; if a signal for interest rate cuts is released, market sentiment may be completely reversed, and Bitcoin's price is expected to welcome a new opportunity for an increase. However, cutting rates too quickly may not be a good thing. I mentioned in a previous article that rate cuts can lead to inflation, which in turn has complex effects on the economy and the market.
From the overall trend, it may be difficult to avoid a round of correction and decline starting with 8 for Bitcoin.
In addition, the ETF upgrade is imminent, but the current market sentiment is generally volatile. In reality, the ETF market is merely a capital game of 'left hand to right hand' among institutions like Grayscale and BlackRock, so everyone should not be influenced by some news.
Currently, the market is in a volatile state, and I would like to share practical operational strategies—centered around 'short high and long low.' When Bitcoin once again stands above $97,700 and Ethereum is around $1,870, it can be seen as an opportunity to short; conversely, when Bitcoin's price drops to around $95,000 and shows signs of a rebound, it is a good opportunity to place long positions. Everyone must closely monitor market dynamics and operate cautiously; I wish everyone can achieve ideal returns in the market!
