The US PPI data unexpectedly cooled in July, impacting the cryptocurrency market last night, leading to a flash crash for Bitcoin and Ethereum, with altcoins experiencing even larger declines. In the past 24 hours, a total of 201,749 people were liquidated across the network, with a total liquidation amount of $951 million. Previously, profits from long positions have significantly retracted, and I plan to take profits in batches next time to ensure secure gains.
Reasons for the crash
The US PPI has crashed the market; in July, the US PPI surged 0.9% month-on-month, marking the largest increase since June 2022, and the core PPI also significantly exceeded expectations! This has two direct consequences:
Inflation expectations are rising again.
Corporate costs have risen, which will ultimately be passed on to the consumer end, putting pressure on the CPI as well. When consumers bear the costs, it means the Federal Reserve cannot ease its stance in the fight against inflation.
September rate cut is 'shrouded in shadows'.
Originally, some in the market were hoping for a 'direct cut of 50 basis points'; now, with the PPI shock, most institutions believe that a 25bp rate cut in September is already giving the market face.
The expectation of a Fed rate cut in September has suddenly dropped to 90%, and a 50 basis point cut has basically been ruled out, which can be said to be a failure of rate cut expectations, leading to a direct plunge in the cryptocurrency market.
BTC
Bitcoin has entered an adjustment phase, with a range between $117,400 - $119,200. A support level of $117,500 has experienced a sharp rebound, and the current critical 'lifeline' is $116,000. If it effectively breaks below on the daily chart, the market will shift to a bearish outlook; another key level is $122,000. If it cannot break through and forms a lower high, the market framework will also turn bearish.
After the $119,300 resistance level failed to break, a pullback occurred. Positions at $118,500 and $117,500 can be attempted for rebounds. If it continues to break below the low, it may drop to $115,000.
The daily trendline support is at $115,988 - $114,988; this is also the next support level for the 1:1 fluctuation range. This support will only be effective this week, and will gradually rise over time, until it reaches the $117,000 position where there was a spike last night. At that time, both longs and shorts may face liquidation. Additionally, the phase low is at $112,888 - $111,888, and the importance of this position is self-evident.
ETH
Ethereum's hourly chart has broken through the acceleration channel and the 12-day moving average, showing short-term rebound potential, possibly a V-shaped reversal, targeting 4666, 4688, 4712, 4770 sequentially. Although the 8-hour MACD shows a death cross, it is still far from the zero axis, leaving room for change. The 4-hour MACD is expected to show a stopping signal within the day, avoiding a drop to the 8-hour adjustment low around 4412.
If the oversold rebound approaches previous highs, consider taking profits; if the breakthrough is successful, look at the 4989 range; if the breakthrough fails, it may continue to pull back, completing the second wave correction before going long again. Funds continue to flow in, with active bottom-fishing and increasing positions; ETH may soon break through 5000.
Altcoin
Although mainstream and small-cap altcoins have rebounded, they are still at low levels. Possible future scenarios:
① Quality altcoins are entering the main upward wave, with rising volume and price, experiencing explosive growth (like OKB rising 200% due to the halving benefit, reaching 130+);
② Most altcoins are slowly rising with the overall trend, quickly surging and distributing when approaching high points.
Can we still hop on the altcoin train?
In the second half of the bull market, choose quality altcoins, gradually build positions, hold until the rise, sell at the end of the bull market without needing to catch the top, just the second high point is enough. This pullback is an opportunity; there's no need to catch every wave of the market, just grabbing most of the profits is sufficient. There are still many opportunities; next year may see wealth legends.
SOL:
Futu has launched retail trading for Solana. After laying out virtual assets in July, they pushed the service in August to attract more funds, which is positive for SOL and its ecosystem; more brokerages are expected to follow. It has already started to rebound, about to break 200, and is beginning to earn significantly.
AOL:
Minting USD1 on the Solana chain is favorable for the Wlfi ecosystem, with AOL accumulating shares in the front row. The meme concept is driven by sentiment, leading to a strong upward momentum. It is recommended to buy in batches at 15m and 10m intervals. Currently, only the USD1 minting is positive, and there is no other substantial news; we will wait for a pullback or new information.
