Bitcoin has been quite volatile recently, fluctuating between key support and resistance levels. As the BTC price approaches critical levels, many traders are closely watching for potential breakthroughs. Since early this morning, Bitcoin has been pushed down to around 93.4k, proving the rising logic with a breakthrough of 96,000 dollars but then quickly pulling back to wipe out following positions. Ethereum surged with the upgrade news, yet prematurely staged a 'good news turning to nothing' scenario. However, through these appearances, we see a market that is 'removing the false and keeping the true' — short-term speculative funds are retreating, while the smart money that truly understands 'monetary narratives' is waiting for a better opportunity to enter.
The most important focus this week is still the Federal Reserve's monetary policy meeting. This time, there is only the interest rate decision and press conference; it is basically unlikely that there will be a rate cut in May, maintaining the interest rate is the script, and the economic data released last week were all leaning towards the positive side, providing more reason to remain cautious. The speeches are expected to be neutral to hawkish, which is normal. The main reason for the major market adjustment is still policy shocks; equally important are tariff negotiations. Early this morning, Trump stated that there would be a 100% tariff on imported films, which caused a slight panic in the market. The negotiations between Japan and the US are not going smoothly, and threats of film tariffs, along with other negotiations just beginning, could raise market concerns again, lacking upward momentum. Last Friday, the market just couldn't move higher; the recent economic data and fundamentals are strong enough that the market is not short-term worried about a recession, and confidence remains. Ahead of the monetary policy meeting, the market will still be cautious; recently, Bitcoin is expected to be weaker than US stocks. Before significant meetings, there are usually either risk-averse positions fleeing or a wait-and-see approach. I believe it is highly probable that there will be no rate cut in May, and it is likely to happen in June. The key is still to see Powell's speech and whether it can boost market sentiment because once a favorable sentiment emerges from such meetings, it can basically be understood for the next one to two months, or a quarter, as referenced by the impact of last year's Christmas speech from Powell that lasted until Trump's inauguration before any change occurred.
It has been mentioned before that after a big rise there are no positive news, and after a big drop there are no negative news; essentially, it is still discussing the leading impact of narratives on market prices. Many times, prices do not rise because positive news appears, but because prices have already risen in anticipation of positive news under the influence of information asymmetry; when the good news is actually announced, the price has already completed its revaluation, creating an illusion of 'no rise despite good news.' The fact remains that prices reflect current expectations, not facts. As of now, regarding the Ethereum upgrade narrative, if the market intends to continue climbing, it must start to exert effort before the positive news materializes; currently, it seems there isn't enough time, but it is still necessary to avoid the positive news driving the price up.
If the bears still dare not open positions while the bulls confidently try to bottom fish, then this three-week-long rebound may likely come to a complete end. In the next week or two, we may face a pullback to 83,000 or an extreme pullback to 76,000; in short, the reflexivity of the futures market is still dominating price behavior. The more people are bullish to above 100,000, the harder it becomes to reach that level; the more people are bearish, the harder it becomes for prices to pull back. This is a prisoner’s dilemma of sentiment, and the parts we can quantify are limited... Therefore, I can only look for a short-term pullback followed by stabilization.
