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Focus on ETH; only dare to buy the dip on altcoins when Ethereum has reached its bottom.
Both Bitcoin and Ethereum have seen significant declines, with altcoins being affected even more, many have already dropped back to the starting point from May 7, or even lower. It can be said that altcoins might be approaching the bottom of this round. Currently, Bitcoin's market control is very strong, and it wouldn't be surprising if it rises to $150,000 one day. Ethereum faces even greater pressure because there are too many retail investors and high leverage, making upward breakthroughs more challenging.
Currently, Bitcoin is more like a 'barometer,' paving the way for altcoins to absorb liquidity. On the Ethereum side, from a 4-hour perspective, after the rise on the 16th, it triggered a lot of chasing-up sentiment, with many eager to increase their positions, thinking a bull market is coming, but often they get trapped right after buying, and after cutting losses, they watch the price rebound. This repetitive struggle is the norm in the current market. We have previously mentioned that ETH is currently operating within a range, roughly around 2700-2800, and many people want to sell as soon as the price returns to this level. Therefore, the market will not easily allow you to operate comfortably.
When the price rebounds, many people fear 'missing the sell' and rush in, resulting in a sell-off as soon as they chase. In this wave of movement, the long upper shadows indicate hesitation in chasing up, and just as the sentiment rises, the market reverses. This is a typical harvest.
We have previously analyzed two types of movements:
1. Oscillating type: Moving back and forth within the 2650-2450 range, wearing down the patience of short-term players and attracting long-term funds to enter;
2. Direct breakdown type: Plummeting to 2350 or 2250, more decisive but the logic is the same, also to wash out cheap chips and attract long-term entry. Currently, it seems ETH is following the first type of oscillating movement and has not broken down yet. If it subsequently breaks down to 2350 or even 2250, it may actually be more favorable for challenging above 3000 later. Therefore, focus on ETH; buying the dip on altcoins when it falls to around 2200-2300 is advisable.
Currently, the Fed's decision not to cut interest rates is the biggest support for US stocks and BTC.
When soft data weakens and hard data has not yet declined, Powell stated that he only looks at hard data and not soft data, emphasizing 'no preventive actions,' which gives the impression that the Fed may act with a delay. Those familiar with monetary policy know that 'going against the wind' is the Fed's fundamental principle, meaning it should stay ahead of the economic cycle. However, the current statements seem to suggest that the Fed might abandon this principle in the face of uncertainty, only acting based on 'lagging' data when an economic downturn or rising inflation is already a foregone conclusion. I don't necessarily think this is the case.
The prevailing view is that the Fed is caught in a dilemma, uncertain whether tariffs will drive inflation persistently up or whether the economy will weaken due to macro uncertainties. However, based on my years of interpreting Fed statements to aid trading, although Powell emphasizes 'unknowns' and 'waiting,' this is not a truly 'indecisive' statement. Powell knows better than us how to assess the impact of tariffs and places significant value on importers' forecasts, just as he trusts the long-term inflation expectations derived from market trading. Business people generally expect tariffs to bring about a 20-30% price pressure, which is inflation; at the same time, demand has not weakened according to consumption data.
'Waiting' actually implies two things: 1. The impact of tariffs on inflation may be one-time; 2. The resilience of the US economy is far stronger than the weakness reflected by soft data (such as sentiment indicators and freight data). Powell certainly understands this, but due to a lack of immediately verifiable evidence, speaking out carries too much risk and deviates too far from market consensus, so he can only 'wait'—waiting for the market to see hard data refute soft data, or for soft data to self-correct.
This 'waiting' is actually the biggest benefit for US stocks and BTC. Because the Fed is not acting due to strong economic resilience, rather than stubborn inflation. In stock terms, this means strong fundamentals, and the Fed still has 425 basis points of policy space available to respond to future recessions. I can't think of a better situation than this.
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