'CPI data is like the 'heartbeat monitor' of the crypto circle; tonight's fluctuations may directly determine whether you profit or lose!'

Why has CPI data become a 'time bomb' in the crypto circle?

There is a truth that must be told: the ups and downs of the crypto market today are no longer influenced by the 'technical analysis'. The interest rate hike or cut expectations of the Federal Reserve, and the tightening or loosening of dollar liquidity, are the real 'behind-the-scenes manipulators'. The CPI acts like the Federal Reserve's 'baton'—high data means inflation is not effectively controlled, and the Federal Reserve may continue to maintain its interest rate stance; low data indicates inflation has cooled down, and the market will immediately become active, raising expectations for interest rate cuts.

However, tonight's CPI data is more special because it contains some 'uncertainties':

Trump's actions have drawn attention: he fired the director of the Bureau of Labor Statistics and replaced him with someone he trusts, which has made the market quite uneasy—will the data be 'manipulated'? Morgan Stanley has publicly stated: 'The credibility of official data is under attack, all assets need to be repriced!'

Statistical methods 'discounted': Due to a lack of funds, the Bureau of Labor Statistics reduced the CPI data collection work in certain cities, opting instead for 'estimation' (imputation). Bank of America estimates that this estimation method's error could reach 0.02% (1-2 basis points), and during inflation-sensitive periods, this small error is enough to cause severe market fluctuations.

Tonight there may be three possible scenarios for CPI data, how should the crypto circle respond?

Situation 1: CPI lower than expected (inflation cooling) — 'Liquidity easing brings a carnival, Bitcoin is expected to hit new highs!'

Possible actions by the Federal Reserve: The probability of a rate cut in September will significantly increase (the market currently prices in a 91.5% chance), the dollar will depreciate, and risk assets, including cryptocurrencies, will rise collectively.

Possible reactions from the crypto circle: Bitcoin may break through the historical high of 123,000 and attempt to reach 130,000; Ethereum (ETH) may test the resistance level of 4,500 dollars; altcoins (like SOL, AVAX) may see a catch-up rally, with gains potentially exceeding Bitcoin.

My view: In this situation, it is worth boldly chasing long positions, but do not go all in. Because inflation cooling will weaken Bitcoin's 'digital gold' attribute, but expectations of liquidity easing will dominate the market rise. However, be cautious of potential 'profit-taking' within an hour after data release, to avoid chasing highs.

Situation 2: CPI meets expectations (year-on-year 2.8%) — 'Short-term oscillation, medium-term trend unchanged'

Possible actions by the Federal Reserve: Maintain expectations for a rate cut in September, but the market may react tepidly due to 'aesthetic fatigue'.

Possible reactions from the crypto circle: Bitcoin will oscillate in the range of 118,000-123,000, and altcoins will show differentiation (strong ones continue to rise, weak ones will pull back).

My view: This situation is suitable for swing trading, do not be greedy. Such 'neither hot nor cold' data can easily lead traders to act impulsively, but the medium-term trend (like the post-halving rise cycle of Bitcoin) has not changed, and the oscillation period may actually be an opportunity to buy low.

Situation 3: CPI higher than expected (inflation is sticky) — 'Liquidity tightening, crypto circle may collectively decline!'

Possible actions by the Federal Reserve: Rate cut expectations will be delayed, and some may even question whether the Federal Reserve will 'sit on its hands', the dollar will strengthen, and risk assets will face sell-offs.

Possible reactions from the crypto circle: Bitcoin may test the support level of 115,000; Ethereum may fall back below 4,000 dollars; altcoins may drop significantly (e.g., MEME coins may halve).

My view: Although this situation is dangerous, it may also be an opportunity to 'buy the dip'. The options market shows a large number of hedge positions concentrated in the bearish range of Bitcoin 115,000-118,000; if it breaks below this range, it may trigger programmatic selling, but 115,000 dollars is a key support level (on-chain data shows there are many long-term holders entering at this price). If it drops to this level, there is no need to panic, and it may be a good opportunity to accumulate in batches.

What is the overall situation in the crypto circle now?

Retail investors are entering actively: 360,000 new Bitcoin addresses in a single day, indicating that ordinary investors are eagerly entering the market, and market sentiment is extremely optimistic.

Institutions secretly increased positions: Last week, net inflow into cryptocurrency ETFs was 571 million dollars, and the market withstood the pressure of 'large holder sell-offs', indicating a relatively strong market structure.

The options market is reacting nervously: Bearish options on Bitcoin are concentrated in the 115,000-118,000 range, reflecting a significant increase in hedging demand, while implied volatility (IV) is rising, indicating the market is 'betting' on significant volatility tonight.

How to operate tonight? 3 tips to help you cope!

Time node: CPI data is scheduled to be released at 20:30 Beijing time, and market volatility may soar by over 50% in the hour before and after; it is recommended to reduce positions 10 minutes in advance and take action after the data is released.

Hedging strategies:

If you hold a long position in Bitcoin, you can buy put options below 118,000 (Put), costing about 2,000 dollars each, which is a worthwhile hedge against 'black swan' risks.

If you want to 'bet' on market volatility, you can buy straddle options, such as simultaneously buying call and put options at 122,000, costing about 5,000 dollars each; if volatility rises significantly, you may see threefold returns.

Trend trading:

CPI lower than expected: Go long on Bitcoin/Ethereum, focusing on SOL (high volatility, may rise over 20%).

CPI higher than expected: Reduce positions by 50%, switch to stablecoins (USDC/USDT), and decide after the support level of 115,000 is tested.

Summary: Is tonight 'getting rich' or 'losing big'?

Data lower than expected: Bitcoin may start a new upward cycle, and 130,000 dollars is not out of reach.

Data higher than expected: Short-term faces pullback pressure, but 115,000 dollars may be a 'golden pit', presenting a low-buy opportunity.

In the long term: If the credibility of CPI data continues to decline, the allocation value of Bitcoin as a 'non-political asset' will systematically increase.

Final piece of advice: Don’t act impulsively tonight, control your leverage, and set stop losses. CPI is just the 'appetizer'; Thursday's PPI data and comments from Federal Reserve officials are the 'main course'—this wave of market movement has just begun!

Follow Su Xiaowan, and I will help you analyze the 'wealth code' of the crypto market!#BTC重返12万