After Bitcoin plummeted by 4000 points, it has slightly risen and is currently fluctuating around 119,000. Ethereum has surged strongly, aiming for new highs! Sponge mentioned in yesterday's article that the current market is entering the final distribution phase, not a good opportunity for long positions. Near the previous high, Bitcoin short-term positions can consider partial profit-taking and then bet on a breakout. If there are no long positions yet, one can pay attention to the gap in BTC CME between 118,405 and 119,110 USD, as the probability of filling the gap is high, making it worth watching and entering appropriately. Bitcoin has filled the gap as expected, currently up 600 points from the entry near 118,400.
BTC
The competition between long and short positions in Bitcoin is fierce. In the later hours of the night, BTC experienced an equidistant pullback, returning to yesterday's starting point at 118,010.
Currently, a long upper shadow has appeared in the daily chart of Bitcoin, forming a typical false breakout, indicating that the upward trend may face risks. The 4-hour chart shows a massive bullish candle quickly broken by multiple bearish candles, mainly due to the risk-averse sentiment triggered by CPI data and technical gap filling. The current gap has not yet been fully filled, and there is still a possibility of repeated fluctuations.
Currently, Bitcoin's upward momentum is still subtly strengthening. In the short term, it is recommended to focus on light positions and low absorption, waiting for the fluctuations to pass before adding positions during a one-sided rally. In the 6-hour chart, the current support level is at 108,050 USD; if 118,000 USD does not break, it is expected to challenge above 120,000 again.
Short position strategy: If Bitcoin quickly breaks above 120,000 and shows a small bearish pattern, consideration will be given to shorting, with stop-loss set near yesterday's high.
ETH
Last night, Ethereum's ETF data inflow exceeded 1 billion USD. With the change of dealers and the stablecoin ecosystem, Ethereum has completely transformed. All credit goes to the aggressive buying by MicroStrategy on Ethereum, creating a rhythm of imitation.
Currently, the overall structure of ETH shows a converging triangle consolidation pattern. If the fluctuations continue without breaking through, a downward trend may occur. The current volume is significantly different from before, where there was a 17% rise, but now it struggles to break through within a 4% range.
Ethereum's turnover rate has increased significantly, but if it still cannot maintain the local high-low structure (HL) after the turnover, the risk will increase, and the probability of looking for support downwards will rise.
Strategy: If 4150 USD is not effectively broken, then no major pullback should be considered, nor should one go short. A high short, low long strategy can be adopted. The key support/resistance level on the daily chart is 4050 USD, which is a watershed for bulls and bears, crucial for future market trends.
Resistance levels: 4310 / 4330 / 4414 / 4458; Support levels: 4153 / 4120 / 4080 / 4050
Altcoin
After more than 10 years of development in the crypto market, the market structure and the supply and demand dynamics have fundamentally changed.
The bull markets of 2013 and 2017 were absolute seller's markets, with crypto assets being severely scarce; any token could skyrocket. Although crypto assets were not as scarce in the 2021 bull market, most altcoins still performed well against the backdrop of extremely loose dollar liquidity.
In this bull market, crypto assets are severely oversupplied, while dollar liquidity is relatively scarce, making it an absolute buyer's market. This inevitably means that this bull market for altcoins will be structural, with only a few altcoins having opportunities, while most altcoins will be cannon fodder. Therefore, investing in altcoins can no longer be done casually as in previous bull markets but must be done with careful selection.
Altcoins have been fluctuating in the current position for several days, mainly to wash out those who rushed in due to the favorable news from Trump's signing of 401(K) allowing for digital currency allocation. Today, many mainstream altcoins are worth adding to positions, such as SUI (today's lowest point is only 0.3 away from the non-bear market bottom point of around 3.3), XRP, DOGE, LTC, etc.
UNI: Due to regulatory relaxation, token empowerment has begun. Value tokens are about to become real value tokens; everyone should not have prejudice against large-cap VC tokens. I started calling out DeFi-related tokens since June, and now UNI is about to take off, and other DeFi tokens will follow.
ETHS: Ethereum is just a stone's throw away from a new high. As Ethereum becomes stronger, coins closely associated with Ethereum have a chance to perform well. ETHS has dropped significantly and is in a bottom area with strong community consensus and great potential. ETHS should not lag behind; its current market cap is too low.
JUV: Current price 1.4, low market cap around 20 million USD. The actual value is far below this market cap, no contracts, all fan tokens are highly controlled; fan tokens belong to a separate sector and will not be delisted. The market making is also controlled by Binance's own team, and if there are speculators interested, contracts will be provided.
CPI turning point
Currently, the market generally expects: Core CPI month-on-month 0.3%, year-on-year 3.0%-3.1%; CPI month-on-month 0.2%, year-on-year about 2.7%-2.8%. The four data points have rebounded compared to last month. Therefore, what to bet on tonight is quite simple: slightly below expectations/previous values is bullish, slightly above expectations/previous values is bearish. A significant deviation from expectations would be very bearish. However, overall, the probability of a major explosion compared to last time's non-farm payrolls is low.
As long as tonight's CPI data is not as absurd as the non-farm payrolls, it can be seen as bullish. The overall economic trend is gradually improving and stabilizing.
If from last September to this January was an increase driven by interest rate cuts combined with expectations of Trump's 2.0 market, then the future surge will be the actual implementation of the Trump 2.0 market post his actual governance along with interest rate cuts.
Therefore, a large-scale altcoin season may have to wait until the bull market of ETF funds transforms into a bull market driven by fundamentals. As for the rise of small-scale altcoins, it will only occur after Bitcoin and Ethereum stabilize and volatility decreases, allowing overflow funds and emotions to rapidly rotate and lift. This timing may come after tonight's data release or after the CPI and FOMC results in September, when macro uncertainty decreases, and the market may increase risk positions.
