Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole annual meeting has significantly increased the importance of this week's non-farm data, and a 'life or death' scenario concerning market direction is about to unfold. Analysts at Deutsche Bank pointed out that the significance of this labor data far exceeds that of previous data; if the data falls short of expectations, the market's bets on interest rate cuts by the Federal Reserve will enter a frenzied mode, and even a violent single cut of 50 basis points is not out of the question.
This situation is a nuclear-level positive news for the cryptocurrency market. Expectations for interest rate cuts have soared, and the US dollar index is likely to plummet. Bitcoin and the entire cryptocurrency market will usher in a super flood of liquidity. Looking back in history, after the onset of interest rate cut cycles, a large amount of cheap capital will flood into the crypto market, and mainstream coins like BTC and ETH often enter a bull market.
Tomorrow, ADP data will be released, with market expectations of 80,000. If it falls below this expectation, it will become the first clear signal for a bearish outlook on the dollar and a bullish outlook on Bitcoin. Although ADP data is not strongly predictive of non-farm data, it has a significant impact on market sentiment and expectation management. The actual determinant of market trends will be Friday's non-farm data, which is the key moment that will ignite market movements.
From Xiao Wan's exclusive analysis, if the data is weak in the short term, expectations for interest rate cuts will quickly rise, leading to a weaker dollar and Bitcoin likely breaking through previous highs. From a medium-term perspective, if the Federal Reserve really initiates significant interest rate cuts, Bitcoin is very likely to replicate the trend seen after March 2020, starting an epic upward movement.
In terms of operations, investors should focus on assets sensitive to the macro economy, such as BTC and ETH, and strategically manage leverage. At the same time, it is advisable to avoid small cryptocurrencies due to their high volatility and greater risks.
The current market has entered a 'data-sensitive period', where any minor changes could trigger significant market fluctuations. Investors must closely monitor the ADP data tomorrow evening as well as the non-farm report on Friday, as these two pieces of data will directly determine the direction of the market in September.
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