Next Tuesday's CPI data is expected to be the most critical indicator during this period.
This data directly relates to whether the Federal Reserve will cut interest rates. $ETH
The reason is simple: if inflation is low, the Federal Reserve may consider cutting interest rates, the US dollar will weaken, and there will be more money in the market, which is definitely a huge benefit for the market.
In fact, there are only two scenarios:
One is that it is lower than expected, which is good news, indicating that inflation is under control, liquidity will loosen a bit, and market sentiment will definitely rise immediately.
High-risk sectors will take action first, such as the SOL ecosystem, RWA, and small layer 2 ecosystem tokens, which will surge significantly.
The second is that it is roughly in line with expectations or slightly higher, which is bad news. There is a high probability that it will drop first, dampening market sentiment, and then gradually stabilize.
According to past experience, the volatile surge and drop in the first few seconds after the data is released are often due to program trading and bots running scripts, and they are likely false moves.
The true direction usually needs to wait for 30 to 90 minutes, until US Treasury bonds and the US dollar establish a trend before it becomes clear.
Another pitfall to be aware of — sometimes the data looks quite good, but the US dollar actually strengthens, and Treasury yields also rise, indicating that there are other bearish factors suppressing the market. In such cases, do not hesitate, just cut losses and exit.
If the logic is correct but the price does not follow, do not stubbornly hold onto such market conditions.