The PPI data for July shocked the market, causing a pullback in the crypto market last night. Bitcoin and Ethereum crashed sharply, while altcoins faced a waterfall effect. In the last 24 hours, a total of 201,674 people worldwide were liquidated, with a total liquidation amount of $951 million. Previous profits from long positions have significantly retraced, and next time, the sponge will choose to take profits in batches for safety.
This morning, I tested the drop to $117,000 and found it couldn't fall further; the market began an oversold rebound. This morning, the sponge posted to remind buying Bitcoin around $118,000 for a small profit of 1000 points. Fans seeking stability can exit.
Reasons for the crash
U.S. PPI crash: In July, U.S. PPI surged 0.9% month-on-month, marking the largest increase since June 2022, and core PPI also significantly exceeded expectations! This has two direct consequences:
Inflation expectations are rising again
As corporate costs have risen, it will eventually pass on to the consumer end, putting pressure on the CPI as well. Consumers paying up means that the Federal Reserve cannot ease up in its fight against inflation.
September rate cut casts a shadow
Originally, there were people in the market saying 'directly cut 50 basis points', but now with the PPI hitting hard, most institutions believe that a 25bp rate cut in September is already a concession to the market.
Expectations for a rate cut by the Fed in September have plummeted to 90%, and a 50 basis point cut has been basically ruled out, which can be said to have dashed rate cut expectations, leading to a direct collapse in the crypto market.
BTC
Bitcoin has entered an adjustment phase, with the current price range being $117,400 to $119,200. The support level at 117.5K shows signs of an oversold rebound. Currently, Bitcoin's critical 'lifeline' is at $116,000. If it effectively breaks below this level on the daily chart, it may turn into a bear market; the other key level is at $122,000. If it fails to break through and form a higher high, the market framework will shift to bearish.
①: Failure to break through the resistance level of $119,300 may lead to a pullback.
②: The two key levels of $118,500 and $117,500 can be used as buy points for a rebound. If the price continues to fall below these lows, the next step may be to test $115,000.
③: The daily trendline support level is between $115,988 and $114,988, which is also the next support level for the 1:1 oscillation range. This support level is only valid for this week; as time passes, the support level will gradually rise, approaching the spike level of $117,000 from last night. At that time, the market may experience significant volatility, with both bulls and bears likely facing liquidation.
④: The stage low is in the range of $112,888 to $111,888, which is a very critical support level worth closely monitoring.
ETH
After Ethereum broke below the acceleration channel and the 12-day EMA on the hourly level, short-term rebound potential is gradually emerging.
Next, ETH may perform a V-shaped rebound, with targets of 4666, 4688, 4712, and 4770 in sequence. Although the 8-hour MACD has a dead cross, it is still far from the zero line, leaving room for variability. It is expected that the 4-hour MACD will issue a stop-loss signal today; if confirmed, it is unlikely to test the 4412 area of the 8-hour adjustment.
If there is an oversold rebound and it approaches the previous high, consider taking profits at the right time; if it breaks through the previous high, then look towards the $4989 range. If the breakthrough fails, further pullbacks may occur, completing a second pushback before considering long opportunities again.
In addition, funds keep pouring in to buy, and there’s no shortage of bottom-fishing, with some even continuing to add positions at this level! Therefore, Ethereum starting with 5 may arrive soon!
Altcoin
Whether mainstream altcoins or small-cap altcoins, even after a rebound, the overall position remains low, and the increase is not significant. So how will the altcoin market develop next?
① Third stage main rising wave: As both volume and price rise, the market will enter an explosive phase, and prices will surge significantly, leading the entire altcoin market to experience rapid increases.
② Slowly follow the major trend: The market shows a gradual upward trend, ultimately reaching a certain high point, followed by several short-term surges for quick distribution, ending the rise.
Most altcoins are likely to develop according to the second model, with only high-quality and well-funded altcoins experiencing significant surges according to the first model. For example, after the supply reduction news for OKB, it skyrocketed 200%, breaking through $130.
Can altcoins still be entered?
Indeed, as the bull market progresses, the wisest move is to focus on those assets you believe have long-term value. When worried about market volatility, you can choose to gradually lay out positions in batches, and once you enter, maintain patience. The best strategy in a bull market is to lie back steadily and choose the right moment to exit.
This pullback is an opportunity; no one can catch every penny in the crypto world or grasp every small market phase perfectly. It’s enough to capture most of the gains; there’s no need to sell at the highest point—selling at the second highest or third highest is completely sufficient. In short, this round still holds plenty of opportunities, and next year will undoubtedly see many wealth legends born, depending on who can seize this wave of opportunity.
AOL: The news of USD1 being minted on the Sol chain is beneficial to the Wlfi ecosystem. AOL has been accumulating, and currently, it is still heavily influenced by meme concepts, causing a strong surge. The 15m and 10m buy in batches, currently, only the minting of USD1 on Sol has substantive news; we are waiting for news and a pullback.
SOL: Futu has launched retail trading services for Solana. In July, Futu's founder just finished laying out virtual assets, and August is here, indicating that more funds will come in, benefiting the entire ecosystem and SOL, with more Q business models likely to follow suit.