Yesterday, the U.S. released the non-farm employment data for April, and the overall data is quite good, which can be considered a small positive.
In April, the U.S. added 177,000 jobs, exceeding market expectations, and the unemployment rate remained at 4.2%, with no signs of deterioration. Coupled with the GDP data released a couple of days ago, it seems that the U.S. economy is not in substantial recession.
Unknowingly, Bitcoin is just a step away from the 100,000 mark again; the market's heat has warmed up a lot. Everyone will notice that Bitcoin is rising quietly, but the rise of other tokens has stagnated, with many even reversing and falling again. What does this indicate? It indicates that the limited liquidity has flowed into Bitcoin. If Bitcoin breaks through the 100,000 mark again, it means liquidity will be drained by Bitcoin; how will other tokens fare?
Secondly, this round of increase is due to a combination of positive factors, but the main driving force is still institutions; otherwise, Bitcoin would not have returned so quickly in such a short time. This wave of upward movement itself is very distorted; rather than saying it is driven by good news, it is more accurate to say that the whales are simply catering to these positive factors to force a short squeeze.
This kind of positive news quenches thirst but does not satisfy hunger because this upward cycle is limited. Ultimately, it will lead to the short squeeze followed by a long squeeze. Overall, the probability of Bitcoin breaking 100,000 again still exists, but personally, I hope it does not break through too smoothly, as that would mean even more suffering for altcoins later.
However, although the price has risen, the trading volume has not increased, indicating that large funds in the circle are still waiting. May is filled with several important messages, including the Federal Reserve meeting on May 7 and the Ethereum Pectra upgrade. These may affect the short-term market direction, and the current market is not too strong, especially for Ethereum and altcoins, which have not seen significant gains, resulting in a failure to release FOMO sentiment, and the market is still oscillating repeatedly.
The ETH/BTC exchange rate is also at a critical position. In the past, every time it dropped to this level, it would start to rebound. Although it may not reverse directly, it could rise first like in 2019 and then pull back for confirmation. Bitcoin's market share continues to rise, absorbing most of the market's funds, but this will not last forever. Once it peaks, altcoins will have a chance to start.
From a time perspective, May is a key node, and it is basically in line with what we have been saying about the rhythm of starting to hype interest rate cut expectations in May! The market's focus these days has been on Thursday's Federal Reserve meeting, and the market generally expects that a rate cut in May is unlikely. It all depends on what Federal Reserve Chairman Powell says about the upcoming sentiment.
