Market Information Analysis
1. The Federal Reserve lowered the benchmark interest rate by 25 basis points to
3.75%-4.00%, marking the second consecutive meeting of interest rate cuts, in line with the market
expected.
2. The Federal Reserve FOMC statement announced that it will end asset reduction on December 1
balance sheet reduction. (Currently reducing $50 billion in US Treasuries and $350
billion USD MBS)
Federal Reserve FOMC Statement: Mortgage loans after the end of balance sheet reduction on December 1
The principal of mortgage-backed securities will be reinvested in short-term government bonds
100% whale 29 closed position $BTC long position represents a major adjustment. The 30th just opened a long position again, indicating the possibility of further increases.
Just focus on the pressure levels around BTC 114,000. The probability of breaking through 120,000 is still quite high.
The key trend to watch can refer to the selling price in my chart, around 1,140,055.36. As long as it breaks through or continues to maintain, there is still a probability of an upward breakout.
Currently, the market's interest rate cuts are said to be nearly fully digested because of the previous massive inflow of whales and the surge of various coins. However, I want to tell you that it has not been completely digested. We need to consider that the second major positive factor, which is also the biggest positive factor, is Powell's announcement of ending QT (which is likely to be announced not long after the interest rate cut information). This can be understood as:
QE (Quantitative Easing) = Printing money + Sprinkling water
The central bank has activated the printing press, injecting money into the market to stimulate the economy, making money more abundant and cheaper.
QT (Quantitative Tightening) = Collecting money + Draining water
The central bank is taking back and 'destroying' the money it injected into the market, with the aim of cooling down the economy, suppressing inflation, and making money scarcer and more expensive.
Stopping QT combined with lowering interest rates can be understood as a super positive factor (one reason for the stock market surge), as this has often been the catalyst for bull markets in the past few decades.
How to understand this?
Stopping QT can be understood as a water tank, where the water is too full (excess market funds leading to inflation) and water is continuously being drawn out (QT draining). Now, he has stopped drawing water. However, while the action of drawing water has stopped, the water level does not decrease, and no new water is added. This means that the liquidity in the financial system has reached its bottom line, and the most tense moment has passed. The market regains confidence! A signal of policy shift.
Interest rate cuts can be understood as releasing water. After stopping the drawing of water, it assesses that there is not enough water in the tank (there is a risk of economic downturn), so it opens the tap and starts injecting cheaper and larger amounts of new water into the tank. In other words, lowering interest rates directly reduces borrowing costs (making corporate loans, personal mortgages, and car loans cheaper), while the returns on money in banks decrease. This will strongly stimulate enterprises and individuals to invest and consume. Funds will flow out of conservative bonds and deposits, wildly seeking places that can offer higher returns. With a flood of funds, the crypto market, as a 'risk asset' with high risk, high return, and high volatility...
Especially mainstream cryptocurrencies like Bitcoin are seen as 'digital gold' and tools for hedging against inflation, attracting a large influx of funds. (Directly a major positive factor)
Warm reminder, real estate will also be stimulated. Increased activity.
The market has completely shifted from the fear of 'funds continuously tightening' to the celebration of 'funds about to become abundant'. (This is why we can see major virtual currencies surging in succession)
The cost of funds has significantly decreased in a short time: Lowering interest rates has made the 'price' of global funds cheaper. For example, buying U.
Therefore, the 100% win-rate whale added more than 100 coins on the morning of the 26th, perhaps because of this. He closed his BTC long position on the 29th (indicating a significant correction), but the 5x long positions of $ETH and SOL have not been closed.
However, just on the 30th, more long positions were opened, which may indicate optimism for the rise.
Overall, focus on the resistance level of BTC at 114,000 to 115,000.
The key is the resistance level of 120,000.
The concept of breakthrough still exists.
Alright, that's all for now. Follow me, a detail-oriented blogger.
