Three key factors prompt us to take a cautious stance on Bitcoin.
First, the Federal Reserve's hawkish stance may significantly reduce institutional buyers' purchases of Bitcoin ETFs.
Second, the decline in global liquidity, especially in dollar-denominated liquidity, suggests that Bitcoin may enter a consolidation phase, as weak foreign currencies bring additional pressure.
Third, technical indicators amplify our concerns: the weekly reversal indicator remains overbought, and the emergence of a monthly shooting star pattern (typically a signal of a potential market peak) further highlights the risk of a recent pullback; however, sometimes a more cautious approach is necessary. The current setup reflects this dynamic.
Following the highly optimistic outlook at the end of September, it is now time to focus on managing downside risks. Strategically, the consumer price index to be released next week may trigger a slight increase in Bitcoin before Trump's inauguration. However, Bitcoin may still face pressure ahead of the Federal Open Market Committee (FOMC) meeting. The monthly closing price will be a key factor to watch.
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