This morning, the central bank announced a rate cut and a reserve requirement ratio cut. After injecting nearly 1 trillion in liquidity, the business environment in the second half of the year is expected to improve slightly. Just before the positive news landed, nearly 5000 stocks in the A-share market rose yesterday. It’s impossible that today's good news wasn't leaked beforehand. After the good news landed, the three major stock indexes continued to turn positive, with about 3200 stocks rising.
It is reported that the US Treasury Secretary has given high praise to Trump's recent tariff policies, and Trump has publicly stated that it is time for tariffs to stabilize. This has led to discussions about the upcoming US-China negotiations. I believe negotiations will definitely happen, but whether they will meet our expectations is a bit difficult, considering Trump's historically bombastic character. However, with the intelligence of the top two political groups globally, this matter should be handled properly without losing face for either side. In summary, the worst phase has passed, and it is sufficient to maintain necessary expectations under not overly optimistic conditions.
Tonight at 2 AM, the Federal Reserve will make its interest rate decision for May, and it is currently almost confirmed that the rate will remain unchanged. What we need to focus on next is Powell's views on the macro economy after the decision. There is no doubt about the market's expectations for rate cuts in the second half of the year; the only difference is whether there will be two or four cuts. However, from the perspective of risk investment, it would be wise to wait until Powell definitively implements the rate cut in writing before considering entry, as it is likely to be too late by then.
On-chain data shows that Bitcoin positions in the range of 92000 to 97000 points have been steadily increasing. Smart money has been ahead of the majority of retail investors in defining the trend. When there is enough liquidity and short-term value support is adequate, even if the market experiences a slight pullback due to insufficient liquidity, the depth of the drop will be extremely limited. Bitcoin has seen an increase of nearly 35% from this low point. If the previous positions still do not have enough support, the gap at the bottom of the CME 91000 point range will be the last opportunity before the market reverses.
New Hampshire has become the first state in the world to legislate for Bitcoin strategic reserves. The state governor officially signed the HB302 bill, which authorizes the state treasury to purchase digital assets valued over 50 million USD. Currently, only Bitcoin is valued over 50 million USD in the crypto market. The sudden rise of the large bullish candle yesterday is likely due to this news. With a leader in place, more Bitcoin strategic reserve policies are expected to emerge globally, marking a very good start for the macro market.
Ethereum's upgrade is about to be completed today. At the 1800 point level, the long and short adjustments have been close to half a month. In the past two weeks, Ethereum's ETF data has shown a trend of net inflows. With the upgrade finally landing, it is expected that Ethereum will break free from its bottom shackles, and personally, I lean towards a bullish sentiment.
In terms of macro data, Bitcoin spot ETFs saw a net inflow of 450 million USD the day before yesterday, followed by a net outflow of 85 million USD yesterday. Ethereum spot ETFs had a net inflow of zero, but saw a net outflow of 17 million USD yesterday. From the data perspective, prior to yesterday, the ETF market was mainly characterized by inflows, but yesterday marked a shift as off-market funds chose to observe emotionally. Everything will be discussed after the overnight interest rate decision.
During this May Day, I visited many places, gaining a lot of different insights into the market's development and our trading mentality. In fact, many partners are not unable to understand the market; rather, their mentality has long been broken. They don't dare to average down when the price drops and hesitate to sell when it rises, ultimately leading to a series of mistakes. The market has quietly entered the latter half of the cycle. Looking back, we find that cycles and directions are never a necessary prerequisite for achieving results, but rhythm certainly is.
BTC: After a brief increase in trading volume on the four-hour chart, the volume has shrunk again. The possibility of a violent upward attack is relatively difficult without news guidance. From a purely technical perspective, the large volatility pattern remains. The four-hour market has shown a top divergence, and after continuous fluctuations downward, the technical aspects have been repaired. Currently, the MACD daily chart shows a death cross, and short-term positions are close to the selling peak. The CME Bitcoin futures market has a gap of nearly 2000 points around the 91000 point mark, and based on historical experience, it is expected to be filled within two weeks. The major trend on the weekly chart shows little change in bullish sentiment, and filling the gap is equivalent to providing an opportunity.
ETH: Ethereum is linked to Bitcoin. Let’s observe the on-chain data after today's upgrade. Overall, I believe the selling pressure from Ethereum’s large holders is not significant at this stage after successive capitulations. Vitalik mentioned a comprehensive transformation at the end of April; historical issues cannot be fundamentally resolved overnight. Expectations are fine, but don't be overly optimistic. In terms of trends, it is expected to hold the support at 1700 points in the short term, with resistance around 2000 points.
Altcoin section: Recently, the meme coins have been performing relatively well, with a small portion of AI concept meme coins showing stronger explosive power. This situation is probably not helpful for most retail investors. I have roughly reviewed the two plans released earlier; during this week of rest, the returns have not fluctuated much, maintaining about 15% overall, exceeding the average increase of tokens on the market. Other discussions can be found in the comments section.
The fear and greed index is at 67 today.
Finally, stay away from leverage and stock up on spot!
