Is the bull market still here? Or is the bear market slowly approaching?

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┇ Multi╮ Quiet period before FOMC meeting        ➠ Volatility ┇

┇ Short┆ Fed cuts interest rates by 25 basis points vs. 50 basis points ➠ Volatility ┇

┇ 建┆ Economic hard landing VS soft landing      ➠ Fluctuation ┇

┇ 仓╰ Trump VS Harris debate ➠ 流体 ┇

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☘️September is the golden month, which has historically been the month of rebound after a sharp decline.

What will happen in September of 24 years?

This week is a good time to build long and short positions, but there are relatively high risks.

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The Federal Reserve cut interest rates by 25 basis points in September. Beware that CPI may bring market volatility

Reuters survey: 92 out of 101 economists expect the Fed to cut interest rates by 25 basis points on September 18, and 9 economists expect a 50 basis point cut. At present, the 25 basis point rate is basically stable. The liquidity of the interest rate cut will not be released all at once, and it must be a long process.

The US CPI data will be released at 8:30 tonight. If the released data is far lower than expected, it will affect the basis point of interest rate cut, thus causing huge fluctuations in the market, so please pay attention.

BTC

In terms of the short-term price of Bitcoin, Bitcoin has briefly broken through $58,000 twice as spot ETFs ended the 8-day outflow of funds. It's just that the 4-hour Si is approaching an overbought position, after which Bitcoin tends to experience a decline. Therefore, Bitcoin may run into trouble at $59,000, which is where the MA200 is located. The resumption of inflows into spot ETFs means that U.S. investors have become active, pushing the Coinbase premium from negative to positive. When U.S. investors buy Bitcoin in large quantities, Coinbase will see positive bargaining prices; conversely, when they sell Bitcoin, Coinbase will see negative bargaining prices.

In addition, the two US presidential candidates had their first debate. Trump is now more likely to be elected president of the United States than Harris, judging by his performance in the debate. In any case, the recent slight increase in Bitcoin prices can be directly attributed to the short-term buying behavior of US investors. The increase of more than $3,000 seems insignificant, but at least Bitcoin has temporarily escaped from a very dangerous area. It is best to avoid testing the $50,000-52,000 area. Otherwise, if it frequently approaches and tests here, the possibility of breaking will be greater.

Due to the rise brought by the resumption of inflows of spot ETFs, almost all the short positions above $58,000 have been cleared. Because a large number of short positions have been accumulated in the $56,000-58,000 range in the previous period, in order to profit from these short positions, the main players may have deliberately pushed up the price of Bitcoin slightly and completed the harvest of the upper airdrops. There is more liquidity below the new material. If Bitcoin turns downward, these longs will face the risk of being liquidated.

Why can’t the crypto market escape the September curse?

Bitcoin has lost an average of 4.5% in September since its creation in 2010. September is Bitcoin’s worst month to date and one of only two months with a negative average return.

There are many discussions about the causes of the September effect, and there is no particularly convincing theory. Here are three main theories:

1. September is a bad month for all risk assets

Bitcoin isn’t the only asset to be impacted by the back-to-school season. Since 1929, September is the only month in which the stock market has seen more declines than increases. This phenomenon is particularly pronounced in the Nasdaq 100.

Economists have tried to attribute the decline to a variety of factors, including increased volatility following a summer economic slowdown and year-end losses for mutual funds. But no one is sure.

Whatever the reason, it’s happening again: As of Friday, September 6, the Nasdaq 100 is down nearly 6% this month.

2. SEC Enforcement Season Puts Pressure on Cryptocurrency

The SEC’s office hours run from October to September of each year. Historically, you’ll find a lot of enforcement actions in September as lawyers work to complete their annual deadlines. Today, the SEC enforcement season is heating up: this month, we’ve seen the SEC’s settlement with crypto fund provider Galois Capital, as well as Wells Fargo’s notice against NFT platform OpenSea. Many predict that by the end of the month, there will be an even greater intensity of lawsuits and settlements against crypto entities. I’m not surprised; I’ve been hearing rumors of larger enforcement actions since early summer, and we’ve long warned about the dangers of the SEC enforcement season.

3. Reflexivity

The best explanation for the September effect is probably: reflexivity. People now expect September to be bad, and it is. This is often the case: expectations drive markets.

In contrast, Bitcoin investors have historically favored October, which is known as “Uptober.” Bitcoin has risen an average of 30% in October, which may have fueled investor enthusiasm. Historically, October and November have been among the best performing months for cryptocurrencies.

Summarize

Data from last week showed that the market generally believes that a 25 basis point rate cut is more reasonable. I personally think that it is more in line with the evolution of the market scenario. A 50 basis point rate cut has strong conditions for an extreme market reversal and harvesting the market, so the Americans will definitely harvest a wave of market leeks first when they release this news!

The recent increase in long-term holders and the decrease in long-term holder selling have been consistent. Similar increases in the supply of long-term holders in history show that this usually occurs during the transition to a bear market.

The short-term holder group continues to experience high unrealized losses, indicating that they are the group most at risk at the moment and will be a source of pressure if the market declines.

☞When the market direction is consistent and unified, it indicates that a market reversal may occur at any time.

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⛵Next week's big events

The United States will release August CPI data next week, which may be important information for the Federal Reserve’s September interest rate cut.

✰ Monday 23:00 US August New York Fed 1-year inflation expectations

✰ US August CPI data at 20:30 on Wednesday

✰ US unemployment benefits at 20:30 on Thursday

✰ Friday 22:00 US September one-year inflation rate forecast initial value