Last night's CPI data met expectations, and the market reacted positively as if it was given a shot of adrenaline. The overall increase in cryptocurrency reflects the market's optimistic sentiment towards the future economic environment.
Specifically, Bitcoin (BTC) has broken through $83,000, setting a new high and becoming the market's barometer. I believe the rise of Bitcoin is mainly driven by CPI data and overall economic recovery expectations.
As inflation data gradually declines, investor confidence is slowly recovering, and funds are beginning to flow back into the crypto market. Especially Bitcoin, as a digital gold with its safe-haven attributes, continues to be favored by the market.
Although it might sound a bit pessimistic, don't celebrate too early; this data should not be considered a reversal signal, but rather just an increase in rebound sentiment.
Regardless of the data released this month, it is highly probable that there will be no interest rate cuts in March. As for how the dot plot changes on the 20th, it depends on the impact of tariffs and negotiations between Ukraine and Russia in the coming days. Currently, expectations for interest rate cuts have reached 59.8% for June, and if they continue to rise, it will likely be a done deal.
Before any interest rate cuts, the market is likely to experience frequent fluctuations, possibly even reaching new lows. Moreover, whether Japan will raise interest rates in May is another matter, and with Trump's reciprocal tariffs in April, these uncertainties make it difficult for the crypto market to reverse.
How does the market view the future? What should we do?
Currently, Bitcoin's price trend is still influenced by macroeconomic policies, market liquidity, and investors' risk appetite. In the short term, the Federal Reserve's decisions will become the focus of the market.
In simple terms, unless the Federal Reserve cuts interest rates early, the crypto market may only see a rebound. Otherwise, under the current circumstances, Bitcoin may continue to face pressure and remain in a volatile market, with the market potentially further concentrating on Bitcoin, weakening the market position of altcoins.
The market has been quite frustrating during this period, and many may struggle to endure it, so I want to discuss the current strategy for the market outlook.
To predict the future market, we should consider several scenarios and respond accordingly. Don't just fixate on predicting a price and hold on tightly; that is very dangerous. It's like trying to guess the bottom or top; don't assume any price level is absolutely unbreakable.
First, the first possibility is that the bull market is still ongoing, with one last wave. In this case, the plan proceeds as originally intended, and if the target price meets psychological expectations, you should exit 70-80%.
The second possibility is that there will be another wave, but it won't reach the target price. If this happens, you can basically liquidate 50%, and prepare to hold on to the remaining portion for another round. After all, the crypto space is known for its volatility; even Solana, which dropped from over 200 to 8, can rise again to new highs. Anything can happen in this circle.
The third possibility is that this round has ended, which is our worst-case scenario. If the bull market is over now, remember it is the end of the bull market, not the beginning of a bear market. A true bear market is characterized by a lack of trading and prices crashing without suspense—that's what a bear market truly is.
This is also why you can't adhere to a single investment strategy in the crypto space, because the market does not follow a single trend; you need to be flexible.