Today, BTC strongly broke through the $120,000 mark, with a 24-hour increase of 3.8%, reaching a high of $122,000, causing short sellers to suffer heavy losses. However, behind this seemingly positive trend, there are undercurrents in the market, with the bullish-bearish battle entering a heated stage. How retail investors choose to act has become the most critical question at present.
1. News: Multiple favorable factors resonate, and the market strongly kicks off.
(1) Strong expectations for Federal Reserve rate cuts.
JPMorgan has recently changed its stance, predicting a high probability of a 25 basis point rate cut by the Federal Reserve in September, with possibly three rate cuts this year. If the unemployment rate exceeds 4.4%, a significant cut of 50 basis points may even be on the horizon. Looking back at the 2020 rate-cutting cycle, BTC prices soared to $64,000. Current market liquidity expectations have significantly improved, and once rate cuts materialize, a new liquidity feast is expected to inject strong momentum into BTC price increases.
(2) ETF capital inflow is fierce.
BlackRock's BTC ETF attracted as much as $1.2 billion in a single week, setting a new high for capital inflow since the halving. The CME's open interest in futures has surpassed $15 billion, with call options accounting for 63%, indicating strong bullish sentiment in the market for BTC. Meanwhile, Metaplanet purchased 797 BTC, surpassing Tesla's holdings, with corporate investors continually increasing their positions, becoming a significant engine driving BTC prices.
(3) Hidden concerns behind ecological prosperity.
The Ordinals protocol's NFT daily trading volume has surpassed 5,000, and Layer 2's locked value has also exceeded $8 billion, marking a significant increase in the activity of the BTC ecosystem. However, Tether's issuance increased by $4 billion in a week, and the stablecoin supply ratio (SSR) surpassed 1.2, with a large influx of leveraged funds into the market, akin to planting 'time bombs' in the market. Once the trend reverses, it could trigger a series of liquidations, leading to significant market volatility.
2. Technical analysis: Bullish and bearish signals intertwine, critical points are imminent.
(1) Daily level: The MACD golden cross expands, and the Bollinger Bands open upwards, indicating BTC is in a strong upward trend. However, the RSI indicator has reached an overbought level of 78, which warns of potential overheating in the market leading to a correction. A similar situation occurred in April 2023, followed by a 17% significant retracement in BTC prices, making historical experience worth referencing.
(2) 4-hour level: The MACD histogram shows negative growth, the KDJ indicator forms a death cross, and both the MA10/MA30 moving averages show a declining trend, indicating clear short-term bearish signals. The critical resistance level around $128,000 has accumulated as much as $3.7 billion in option contracts, which will become a key battleground for bulls and bears, and the market trend may see significant turning points here.
(3) Support and resistance levels: Support has moved up to $115,000; if this level is lost, the market may quickly drop to $110,000 to seek support. The resistance level at $128,000, if successfully broken, will bring the $130,000 mark within reach. The competition for support and resistance levels will determine the direction of BTC prices in the short term.
3. Market structure: Institutions lead, retail investors respond cautiously.
CME open interest surged by 47%, showing increased market trading activity and intensified bullish-bearish divergence. However, Canaan Creative's mining machine gross margin plummeted by 29%, and amid the institutionalization of computing power, miner selling pressure has dropped to an 18-month low, indicating a relief in market supply-side pressure. BTC is negatively correlated with the U.S. stock VIX index at -0.73, indicating an enhanced safe-haven attribute, but Google search interest is only 45, reflecting a divergence between current market sentiment and capital flow, increasing potential volatility risk in the market.
In this institution-led market environment, retail investors should remain cautious. Aggressive investors can try to go long with a light position near $120,000, setting a stop-loss at $114,000, targeting $128,000 - $132,000, keeping their position under 3%; conservative investors can wait for the price to pull back to the $115,000 - $118,000 range to build positions in batches, with a single investment not exceeding 20% of their assets. At the same time, it is crucial to strictly control the spot holding ratio within 50%, avoid leveraged trading, and prevent significant losses due to market volatility.
4. Market trend prediction for this week: Breakthrough or correction?
From a technical perspective, the daily MACD golden cross is strongly operational, and the Bollinger Bands continue to open, but the RSI overbought issue cannot be ignored; the death cross at the 4-hour level also suggests a demand for short-term adjustments. $128,000 serves as a critical watershed, accumulating a large number of option contracts, with bulls and bears fiercely clashing here. If this resistance level cannot be broken, BTC prices may retrace to around $110,000 in the short term; if successfully broken, the $130,000 mark will be quickly reached.
From the news perspective, if the (GENIUS Act) is successfully passed, institutions like BlackRock will increase their BTC allocation from 0.3% to 1%, expecting $80 billion to flow into the market, directly pushing BTC prices toward $150,000. However, the increased supply of stablecoins brings leverage risks, and the divergence between market sentiment and capital flow could also trigger market adjustments at any time.
This week's BTC price trend is full of uncertainty, either violently breaking through key resistance levels to initiate a new round of upward momentum or correcting to clean up leveraged funds to lay a foundation for future trends. Investors need to closely monitor changes in bullish and bearish forces, strictly execute trading strategies, seize opportunities, and control risks in a complex and changing market.
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