May 7th Federal Reserve interest rate decision, how to choose the direction
Bitcoin has recently shown signs of a pullback, but the support at 93,500 will be strong. As long as this level holds, the overall trend will still lean towards bullish!
Many people believe this rebound trend has reached its limit, but it can only be said that their understanding of the market is not high enough. Major trend changes also require strong support from significant forces to be effective!
Currently, many institutions are positioning themselves in Bitcoin, and the overall liquidity of Ethereum has great prospects, so the trend has not yet reached its limit. 100,000 is not far off!
There are two key nodes in the upcoming market that need to be focused on:
First is tomorrow's ETH upgrade. Currently, there is a cautious attitude towards this news, worrying that the main force may take the opportunity of the ETH upgrade to release their holdings;
Second is the interest rate meeting on May 8th (the day after tomorrow). From various perspectives, this meeting is likely to release negative signals. (Historical experience shows that Powell's dovish or hawkish remarks directly affect market sentiment; for example, after he released a signal for interest rate cuts in 2024, crypto assets surged in a single day, while hawkish statements triggered sell-offs. If this meeting releases concerns about inflation stickiness or delays interest rate cuts, it may trigger a pullback in the crypto market. Conversely, if risks of economic slowdown are mentioned, or if expectations of liquidity tightening ease, it can become a short-term bullish factor.)
In addition, several Federal Reserve officials are scheduled to speak on Friday, which may convey divergent signals. If Williams and other “permanent voters” lean towards tightening, it may offset Powell's possible moderate wording, leading to confusion in market expectations. Currently, the crypto market is strongly correlated with U.S. stocks, and changes in liquidity expectations may amplify volatility.
Considering these two factors, the market is likely to experience an accelerated decline in the coming days, so it is necessary to closely monitor market dynamics and take precautions against risks.
Trading Strategy: Long Bitcoin at 92,500-93,500, with a target near 97,000-99,000. Stop loss at 90,500.
Long Ethereum at 1,730-1,770, with a target near 1,900-2,000. Stop loss at 1,700.
The market is constantly changing, and I will notify you as soon as possible.
