In the world of cryptocurrencies, things seem calm on the surface, but underneath, currents are already surging. And tonight, two powerful 'bombs' are about to explode, likely causing a tremendous upheaval in the crypto circle. At 20:30, the US inflation data is set to be released!
Bitcoin's price movements are as thrilling as a roller coaster, plummeting from a high of 124,000 to the current 110,000, with a correction exceeding 10%. The frenzy of funds pouring in and surging has long since vanished, and the current market is filled with caution. Institutions have started to play 'mind games,' engaging in 'cross trading' operations. On one hand, they firmly lock in the substantial profits they previously accumulated, while on the other hand, they keep their eyes wide open, waiting like cunning hunters to 'pick up bargains' in the market after the data is released. In stark contrast, retail investors are still immersed in beautiful fantasies, enthusiastically discussing in various groups, eagerly hoping for the miracle of a 'violent pullback', their eyes glued to the K-line, awaiting a price rebound. Yet they completely fail to realize that the severe turbulence about to arrive tonight is like a storm, likely to throw those who haven't fastened their 'seatbelts' out of the vehicle and leave them in dire straits.
Let's first thoroughly analyze this 'chess game' concerning Bitcoin's life and death. In the current market situation, the price level of 110,000 is truly Bitcoin's 'lifeline!' At this moment, both bulls and bears are fiercely fighting at this critical point, and the battle has entered a heated stage. If the bulls can successfully defend the 110,000 line, Bitcoin may still have a glimmer of hope to rebound to 115,000, starting an upward repair journey. However, if it unfortunately falls below 110,000, the consequences will be unimaginable. What awaits Bitcoin will be an unfathomable abyss, and the price is highly likely to plunge towards 108,000 and 107,000. By then, those who are eager to buy at the bottom will not even get the chance to enter the market, while those already holding positions will face the tragic fate of their assets being 'cut in half.' Just think of the painful tragedy of the liquidation that occurred in the crypto circle last Valentine's Day, where countless investors lost everything and families fell into crisis. Tonight, a similar tragedy is likely to unfold again, especially for those unprepared investors.
Now let's focus on tonight's two 'time bombs,' each of which possesses the enormous potential to influence the direction of Bitcoin's price.
First, the US inflation data to be released at 20:30 will serve as a 'command baton' for Bitcoin's price movement, directly leading Bitcoin 'by the nose.' In today's cryptocurrency market, which is increasingly interconnected with traditional financial markets, the US inflation data acts like a 'seesaw' between the dollar and Bitcoin, showing a very close inverse correlation. Specifically, if this inflation data exceeds market expectations, it will undoubtedly provide a 'boost' to the dollar index, likely triggering a surge in the dollar index. In this case, funds will flood into the dollar market like a tide, seeking safety and profit, while the Bitcoin market will suffer a 'bloodletting' blow, and its price will inevitably drop significantly. The 110,000 threshold may instantly be breached under strong selling pressure, causing the price to plummet. Conversely, if the inflation data falls short of expectations, the market's expectations for interest rate cuts will be instantly heightened, leading investors to believe that market liquidity will significantly increase, presenting money-making opportunities. Thus, funds will rush into the crypto market like wild horses, and Bitcoin will naturally become the 'darling' in the eyes of many investors. With a surge of funds, Bitcoin may leverage this favorable wind to rebound strongly, even having the chance to challenge the high of 112,000.
But never naively think that 'low inflation means guaranteed profits'; the complexity of the market far exceeds imagination. Looking back at last year, there were instances of inflation being lower than expected, and at that time, the market widely anticipated a surge in Bitcoin, with investors eagerly preparing to buy in. However, reality dealt them a heavy blow, as the market played out a 'buy the expectation, sell the fact' scenario. Bitcoin's price briefly rose before quickly turning downward, trapping a large number of trend-following investors. They watched their account assets shrink dramatically, wanting to cry but powerless. Therefore, tonight's inflation data is not a simple 'either up or down' choice but is filled with various complex possibilities, presenting a series of traps such as 'how much will it rise, how much will it fall, will it reverse,' and a small mistake could lead investors deep into it, making it difficult to extricate themselves.
Next, Cook's confrontation with Trump at the hearing at 22:00 is another hidden 'black swan' that could bring unexpected shocks to the market at any moment. Many people's first reaction might be, 'What does the Apple CEO's hearing have to do with Bitcoin?' but in reality, this thought is completely wrong. In today's globalized financial market environment, any seemingly small event can trigger a series of chain reactions through complex economic chains, ultimately having a significant impact on the cryptocurrency market.
Specifically regarding this hearing, if the controversy over 'Federal Reserve independence' is triggered at the hearing, it will be like throwing a large stone into a calm lake, inevitably stirring up huge waves. For example, if Trump openly questions the current monetary policy of the Federal Reserve at the hearing, or if Cook complains about the current economic environment citing the difficulties faced by Apple, these statements will instantly tighten the market's nerves, causing investors to fall into extreme panic. Driven by this panic, funds will flee like startled birds to relatively safe assets such as stablecoins, seeking a safe haven. Bitcoin, as a high-risk crypto asset, will naturally become the target of investor sell-offs; even if inflation data is favorable, under the overwhelming panic, the price of Bitcoin will be ruthlessly pushed down, leading to a significant drop.
Such 'seemingly unrelated yet profoundly impactful' events are the most dangerous 'traps' for retail investors. Because retail investors are already at a disadvantage compared to professional institutional investors in terms of information acquisition and analysis capabilities. While retail investors are eagerly anticipating the market trends following the release of inflation data and meticulously planning their investment strategies, they may be caught off guard by the sudden news from the hearing. By the time they react, their positions may have already been liquidated due to significant price fluctuations, and years of savings could vanish in an instant, rendering all their efforts futile.
Tonight's cryptocurrency market battle is not just a simple 'betting game,' but a life-and-death battle concerning every investor's 'little life,' that is, the safety of their funds! Here, I present three iron rules to all retail investors; as long as you strictly follow them, you can at least avoid 80% of the pitfalls and maximally protect your capital safety.
The first iron rule: Do not exceed 3x leverage; never risk your principal to 'gamble.' The current market volatility is more thrilling than a roller coaster; even 1x leverage can be ruthlessly shaken out in the face of such drastic price fluctuations, let alone those high leverages of 5x or 10x. For instance, during a previous market fluctuation, an investor was overly confident, adding 5x leverage to bet on favorable inflation data, thinking they could make a big profit. However, when the data was released, the market movement completely caught him off guard; Bitcoin's price dropped instantly by 5%, then quickly rebounded. But it was this brief price fluctuation that caused his position to be forcibly liquidated, not only losing all his principal but also owing a substantial amount to the platform, leading to a life that had previously seemed beautiful falling into crisis. Therefore, tonight, in such a complex and volatile market environment, leverage should be limited to a maximum of 3x. To be safer, consider investing in spot assets instead; never confront the market head-on. It is essential to maintain a respectful attitude towards the market for survival.
The second iron rule: Accumulate positions in batches; never go all in at the 110,000 price level. Many retail investors have the mindset of buying at the bottom, which is not inherently wrong, but the key is to grasp the right timing and rhythm. For those looking to buy Bitcoin at the bottom, it is essential to stay patient and not rush into the market. First, closely monitor the price movements, and when Bitcoin dips to the 108,000 - 107,000 range, then start taking action. Furthermore, when adding to positions, adopt a strategic approach and accumulate in three batches. Specifically, buy in with 30% of your capital first; when the price continues to drop to 107,000, cautiously add another 30%. The remaining 40% of funds should be kept aside for emergencies to prevent further price drops. If Bitcoin's price does not reach our anticipated range, it is better to choose to stay out and wait than to chase after highs impulsively. Blindly chasing after highs now is no different from those who bought Bitcoin at the high of 120,000 last year, and the likely outcome is standing on a high 'mountain peak,' watching helplessly as one's assets shrink without any recourse.
The third iron rule: Keep an eye on the dollar index and reserve stablecoins as a 'backup.' In your trading software, be sure to set the dollar index (DXY) as an alert and constantly monitor its dynamic changes. Because the dollar index is closely related to Bitcoin's price movements, once DXY rises and breaks through 101, it sends a strong signal indicating that the dollar is strengthening. In this scenario, Bitcoin will undoubtedly face enormous pressure, and its price is highly likely to drop. At this point, investors must act decisively, quickly reduce their positions, and protect their capital and profits. Conversely, when DXY falls below 100.5, it indicates that the dollar is starting to weaken, and the market environment is relatively favorable for Bitcoin, presenting a rebound opportunity. Investors can consider adding a small amount to their positions to seize potential profit opportunities. At the same time, in your position allocation, you should reserve at least 30% of stablecoins. This portion of stablecoins acts as our 'lifeboat' during turbulent market conditions; if the market goes out of control and prices fluctuate significantly, we can promptly use this portion of stablecoins to reduce our holding costs or decisively stop loss to prevent further losses. Never throw all your money into Bitcoin at once; otherwise, if the market trend goes against your expectations, you won't even have a chance to 'turn things around' and recover your losses.
Finally, I sincerely want to say something from the bottom of my heart: the more chaotic the market is tonight, the more we must remain calm. Calmness is the key to survival in the crypto circle. When others panic and rush to buy at the bottom or blindly chase highs, you must operate strictly according to discipline and not be swayed by market emotions; when others are fixated on data, shouting about 'violent surges and crashes,' you should focus closely on the critical line of 110,000 and the dynamic changes of the dollar index to make rational investment decisions. You must understand that the crypto circle has never been a place of 'who reacts faster,' but rather a battlefield of 'who makes fewer mistakes.' In this market full of temptations and traps, do not think that you can 'get rich overnight' with tonight's market; that is just an unrealistic fantasy. If you can preserve your capital in such a complex and dangerous market environment and survive to wait for the next real opportunity, you have already succeeded in outperforming 90% of retail investors and become one of the few winners in the market.
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