June 28, 2025 Report
Yesterday, after the opening of the US stock market, both the Nasdaq and S&P reached new highs, and the overall trend remained relatively stable.
However, the performance of cryptocurrency stocks and some small-cap stocks showed signs of weakness, with Crcl and Coinbase starting to pull back. The momentum of the Russell 2000 small-cap index has also clearly weakened, which is similar to the trend in the cryptocurrency market.
Bitcoin is currently fluctuating around $107,000 with reduced volume; after rising, it couldn't hold its ground, and ETH and altcoins are also hesitant to follow.
Currently, the market lacks upward momentum, but it won't easily fall significantly unless a major negative event occurs, like the crash of the Japanese stock market in August 2024 or a significant negative event like the restart of the tariff war in March 2025.
Without these black swan events, the market will likely just consolidate sideways, entering a waste time phase, neither rising nor falling, slowly testing everyone's mindset.
Last night, the US also released the latest core PCE data, which was higher than before. The core PCE is the inflation indicator that the Federal Reserve is most concerned about; the 2% inflation target they mention refers to this.
Rising data means inflation is further from the target, indicating that US inflation is still rising, while consumers' willingness to spend is declining.
Although the data is not ideal, the rise in inflation primarily comes from commodity prices and housing prices.
Housing prices have actually started to cool down; it just takes some time to reflect in the PCE data. The rise in commodity prices is more due to market expectations regarding tariffs.
If tariff policies can be implemented in the future, these issues should gradually ease. Therefore, although PCE data is relatively high, it hasn't reached an uncontrollable level, and the market's reaction is not significant.
More importantly, this data has strengthened investors' expectations for the Federal Reserve to cut interest rates.
Yesterday, Powell and other Federal Reserve officials also hinted that a rate cut would occur in September. The CME FedWatch Tool shows that the probability of a rate cut in September has risen to 74.8%.
From the Bitcoin data perspective, the turnover rate is also not high, and the distribution of chips has not changed much. Short-term support is at $100,500 - $105,000, with strong support at $93,000 - $98,000.
This bull market is led by large funds and institutions, primarily a Bitcoin bull market. They have locked up most of the chips and are optimistic about the future, not very concerned about short-term fluctuations.
So even with negative news, like the previous conflict between Trump and Biden or the Middle East conflict, Bitcoin would only drop by about 30% at most; it is difficult to see a traditional bear market crash.
Moreover, each time the price falls to a key support level, funds will come in to buy the dip and stabilize the situation.
For Bitcoin to experience a significant drop, it is not enough to rely solely on weak buying momentum; two conditions must be met: one is weakened upward momentum, with less buying and weaker demand. The other is a major negative event, such as an economic crisis or geopolitical conflict.
Currently, momentum has indeed weakened, but the weight of negative events is insufficient, so the price will fluctuate with reduced volume at high levels, making it hard to drop significantly.
In the future, for Bitcoin to surge, it will need demand and momentum to recover, along with macro-positive factors, such as policy support, the Federal Reserve's quantitative easing, or global economic recovery.
Currently, although there are many positive news, demand and momentum have not kept up, so the market will likely consolidate at high levels without a significant drop for now.
Unless a true black swan event arises, that would be a good opportunity for us to pick up chips at low prices.