We all know that the market fell a bit earlier due to tariffs, and the market warmed up again due to Trump's softened stance on tariffs. Now, the market's attention has shifted to macro data. This Wednesday, the US will release its first quarter GDP data, followed by unemployment and non-farm payroll data on Friday. These are all events that can affect short-term price movements.
Additionally, early Tuesday morning, Arizona has a third reading on its Bitcoin state strategic reserve, which may still require a vote. If this passes and is signed by the governor, Arizona will become the first state in the US to establish a Bitcoin strategic reserve, which will also be a favorable sentiment.
On Wednesday, PCE will be released, which is a key inflation indicator closely monitored by the Federal Reserve. In March, the US increased some tariffs, pushing up commodity prices, so this PCE could see a significant increase. If the PCE data jumps too sharply, market sentiment could quickly turn negative.
Tonight, with the US market opening, the main forces for Bitcoin will be back. Last week, the Bitcoin ETF had a net inflow of over 3 billion. Over the weekend, MicroStrategy released an investment tracking chart again, suggesting a continued aggressive buying mode. Recently, many reports indicate that a portion of tariff revenues will be reserved for Bitcoin, and this amount of funds will not be small.
It is clear that BTC has entered a weekly level adjustment, or the adjustment is already over halfway done. Since it is a weekly level adjustment, it is basically impossible to see a bottom reversal and new highs without a rate cut. I think it would be good enough if it can stabilize around 90,000 in May.
Based on the time and depth of this adjustment, which is much more severe than initially anticipated, if the bull market continues, it is estimated that it will not end in June-July but is more likely to be postponed to September-October. However, I don't think it will extend to the end of the year for a double top. We will have to see as we go; in any case, in the later stages of the bull market, reduce positions and take profits instead of being greedy. If you are out, try not to jump back in.
This bull market is controlled by Wall Street, which has teamed up with Trump's loudmouth to create hype, run, and recklessly cut losses, leaving retail investors in a terrible situation. The Chinese have unlimited discourse power in the crypto circle, and I suggest everyone lower their expectations for the crypto space, operate conservatively, and prioritize survival. It is possible that in the next two to three months, those institutions will shift to operating ETH as the market's main line, as it has enough room for growth, while upgrades and ETF staking expectations exist, but the price just can't rise.
Even if the top collapses and the bull market ends, BTC will likely not drop 50% in three months or 80% in a year like before. BTC will belong to Wall Street's large funds and institutional ETFs, used for market making and funds reserves by listed companies and small to medium countries' foreign exchange reserves. The rich and companies will also treat it as an asset for value preservation, increasing 2-5 times every four years, which is quite appealing. BTC has already distanced itself from new small investors.
The ETH/BTC exchange rate for Ethereum has stabilized and is currently above 0.019, with the coin price also above 1800. In the short term, there are two expectations for Ethereum: the first is the PECTRA upgrade on May 7, and the second is the progress of the staking ETF.
Over the weekend, Grayscale began pressuring the SEC, stating that due to the lack of a staking ETF, Grayscale has already lost $61 million in revenue. Other institutions are likely quite anxious as well. Many altcoins applying for ETFs are key objects to watch this year.
Most altcoins looking for signs of improvement can refer to Bitcoin's market cap ratio. Simply put, if Bitcoin's ratio starts to decline, it indicates that money is beginning to flow from Bitcoin to other mainstream coins and altcoins.
Currently, Bitcoin's market cap ratio is 64%, not far from the previous bull market's peak of 71%. However, I think it will not rise that high this time. In the past, there was a slight decline in Bitcoin's market cap in November-December 2023 and is expected to do the same in the same period in 2024. This is when altcoins will start to rise, so when Bitcoin's market cap starts to turn down, that will be an important signal for altcoins to initiate.
Now, we need to focus on the exchange rates of Ethereum and Bitcoin, as Ethereum is the largest public blockchain. Their strength can indicate whether market funds are starting to flow out of Bitcoin. Over the past three months, the exchange rates of mainstream coins against Bitcoin have been declining, which is why altcoins have remained inactive. This is also the reason why altcoins have not performed or participated much recently.
However, there has been a turnaround recently as some mainstream exchange rates have stood above the 20-day moving average. If they can stabilize, it will confirm that funds are starting to flow into mainstream coins. However, it still needs to be observed; after all, the exchange rate of Ethereum to Bitcoin has not been able to regain the 20-day moving average since it fell below it on January 8 of this year.
In simple terms:
If Bitcoin's market capitalization ratio starts to decline, altcoins will have a big opportunity. The key is whether the five major mainstream coins can collectively break through the 20-day moving average. Currently, three have already broken through, and if the remaining two, Ethereum and Ripple, can also break through, altcoins will at least be able to catch their breath.
Brothers, gather in the chat room quickly:
