Friends, this matter is quite strange! With Bitcoin's price plummeting, will it fall to $80,000? Where is the turning point in the market?
What is the Federal Reserve up to again? Goldman Sachs warns that the Federal Reserve is not expected to cut rates this year! What exactly is happening?
The U.S. unemployment rate has unexpectedly soared. Is the Great Depression really coming?
The starting point for Bitcoin's rise is around $73,000, increasing to around $112,000. If a significant correction occurs this time, the first wave may drop to the dense trading area around $98,000, followed by seeking support in the $89,000 to $90,000 range. Currently, the short-term small support level is above $100,000, and a slight rebound may occur in the dense trading area around $103,000. Investors who have not exited can gradually leave the market when it rebounds to around $106,800 and $108,000, while short sellers can take the opportunity to increase their low-multiple short positions.
In fact, I also hope that Bitcoin can continue to break past its previous high, but the question is, where will the funds come from?
Since the last interest rate cut by the Federal Reserve in December last year, it has not released any liquidity. Now, it's quite difficult for Bitcoin to break past its previous high, as the funds in the market are insufficient to support its continued rise. Only a rate cut can bring about improvement.
However, the prospect of a rate cut is now mired in difficulties due to tariff issues being delayed. Goldman Sachs Vice Chairman Kaplan stated that the Federal Reserve may not cut rates this year, which is indeed shocking.
Trump also felt anxious because of this. Just last night, he invited Powell to discuss future economic policies in detail. It remains uncertain whether Powell can soften his stance, but if interest rates are not lowered soon, the cryptocurrency market, U.S. stocks, and the American economy may face significant problems.
The next Federal Reserve meeting is scheduled for June 19. There will definitely be no interest rate cut this time. However, we can look for signals of subsequent rate cuts from Powell's remarks. If he remains vague, then the likelihood of a rate cut in the short term will be very slim. Because if the Federal Reserve intends to cut rates, it usually releases hints to the market one or two meetings in advance.
The above is a basic analysis from a macroeconomic perspective. In the short term, the cryptocurrency market has been thrown into chaos by a gambler named James. He has continuously placed over $1 billion in 40x leverage long positions, enticing many traders to hunt him down. Traders occasionally sell off to liquidate him, causing the currency price to drop. James was forced to stop-loss, which further triggered another drop in the currency price. In just 7 days, he was liquidated for over $100 million, and along with the supporters who followed his operations, the actual loss amount is even greater. Fortunately, he is close to bankruptcy; otherwise, traders would continue to sell off to seize his liquidated principal. After all, in the zero-sum game of the cryptocurrency market, someone’s loss means someone’s profit.
In addition to the impact of news, Bitcoin's on-chain data has also issued warning signals.
For example, the floating profit and loss ratio of Bitcoin on exchanges has reached 12 times, very close to historical highs. Once this ratio approaches, people often begin to take profits. From past data, whenever this ratio nears 12 times, it usually indicates that the market is close to a peak.
In addition to exchange data, the relative floating profit and loss ratio on-chain has almost peaked. Although it seems to be a bit short, there have been past instances where peaks were seen here. Therefore, the risk-reward ratio for entering the market currently is extremely unfavorable. As mentioned in our previous analysis on the greed and fear index, the upward greed space in the market is only left with a 5% to 10% increase, while the downward correction space is quite large.
I certainly will not add positions in an extremely greedy market, trying to grab that last penny. Even if you make money, I won't envy you, because you may end up getting stuck at the peak, which is undoubtedly a losing deal.
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