Bitcoin rebounds strongly after a sharp drop, the dollar reaps the world, Asian currencies defend, and the East Asia's strong stance boosts the Renminbi.

First, let's analyze the two main reasons for this significant drop.

First, the non-farm payroll data released by the U.S. last Friday was a black swan, exceeding expectations and reigniting inflation risks in the U.S., delaying interest rate cuts to October, leading to a drastic drop in market sentiment.

Second, the policy outlook during Trump's presidency continues to raise inflation concerns. Since the 2024 election date, the U.S. dollar has appreciated significantly, now surpassing the 110 mark. As the dollar and U.S. bond yields continue to rise, global assets have plummeted. Today, apart from Bitcoin, the Asia-Pacific market has faced a double hit in stocks and currencies, with the Asia-Pacific stock market declining across the board, and the exchange rates of the yen, won, and Indian rupee against the dollar have all fallen to multi-year lows. However, the Bank of East Asia has expressed a strong stance, indicating a firm prevention of risks from exchange rate overshooting. Both the exchange rate and stock market have stabilized, and the next step may be a significant sell-off of dollars and U.S. bonds to mitigate the impact of this wave of dollar appreciation.

In the next wave, we need to pay attention this week to whether the dollar index will continue to rise, whether Japan will continue to raise interest rates like it did last August to attract capital, whether the U.S. CPI data will continue to be a black swan or rescue the market, and how the U.S. will resolve the bond issue. Each of these is a major concern, and the possibility of the market continuing to decline is high. Be cautious when going long and avoid heavy positions.

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