The May Day holiday has come to an end, and the main forces have started to carry out sneak attacks and dumping operations. Since early this morning, Bitcoin has been driven down to around 93.4k, and the main forces are expected to stabilize in the next couple of days.
The most important focus this week is still the Federal Reserve's interest rate meeting. This time there will only be a rate resolution and a press conference. Basically, there will still be no rate cuts in May, and maintaining the interest rate is the script. Moreover, last week's economic data leaned towards the positive side, providing more reasons to continue to remain observant. The speeches are expected to be neutral to hawkish, which is very normal. The main reason for the major market adjustments is still policy shocks, and equally important are tariff negotiations. Early this morning, Trump said he would impose a 100% tariff on imported films, which startled the market a bit.
The US-Japan negotiations are not going well, threatening film tariffs, and other negotiations have just started. These will raise market concerns again, leading to insufficient upward momentum. Last Friday, the market was not moving up. Last week's economic data and fundamentals were strong, so the market is not worried about recession in the short term; the confidence is still there. Before the interest rate meeting, the market will remain cautious. Recently, Bitcoin is expected to be weaker than US stocks. Typically, before major meetings, either there will be an exit from risk positions or a wait-and-see approach.
I think it is highly likely that there will be no rate cuts in May, and it is likely that there will be rate cuts in June. The key is to see Powell's speech and whether he can uplift market sentiment. Because once a positive sentiment emerges from such a meeting, it can basically be understood for the next month or two, or even a quarter. Referencing the impact of Powell's speech last Christmas, it continued until Trump took office before there were changes.
Looking at the long term, a big bull market will definitely come. I believe that with the entry of institutions, the four-year cycle law is clearly not suitable for this market anymore.
First of all, the entry of institutions means that this market has already become mainstream; otherwise, so many people wouldn't think that the current crypto circle is just a leveraged version of NASDAQ tech stocks. Secondly, after institutions enter, the market will become more regulated, but the harvesting will be more frequent. This is because the crypto circle is tightly bound to the mainstream market, which means it will be affected by any news or policy changes. The frequency of it operating independently will decrease. The trend of this rebound is merely a liquidation of short positions; don't think too much. I believe that this wave of pulling up, in conjunction with institutional support and expectations of interest rate cuts, can only be regarded as an appetizer in the middle, with the bigger moves still to come.
The purpose of this wave of pulling up is to cooperate with the expectation of interest rate cuts to explode the shorts, which is not sustainable in the long term. Bitcoin seems strong, but altcoins are starting to plummet again. Could this be the beginning of a bull market? ETH has good news, BTC has institutional support, but other tokens do not have any decent good news expectations. In summary, this wave of market may not seem that violent, but the ratio of shorts to longs has reached a balance point, and this round of washing has come to an end.
Finally, summarizing this month's three turning points:
The first is the cryptocurrency legal draft on the 6th of this month.
This bill is the first formal proposal so far and will affect the development direction of the entire market.
On the 7th of this month, Ethereum upgrade.
This upgrade can be said to be the biggest positive for the fundamentals of individual coins this year. Whether Ethereum can turn around depends on the sentiment from this upgrade.
On the 8th of this month, the Federal Reserve meeting:
Mainly discussing the sentiment of interest rate cuts, May is basically maintaining the status quo without rate cuts, and June is already more than 50%, but Trump's uncertainty is quite large. Although Trump has been calling for rate cuts, the issues of the economy and tariffs have been affecting the market. No one can say whether there will be changes. Whether the sentiment of speculation on interest rate cuts in May can come depends on this meeting!
