July 6, 2023
The current currency market is still somewhat related to the macro economy, and is not a completely independent market. From the perspective of liquidity and sentiment, whether the Fed adopts a tightening attitude still has an unignorable impact on the overall market environment. Although the currency market is still decoupled from the US stock market, this does not mean that the currency market can be separated from the influence of macro sentiment.
The minutes of the Fed's recent June interest rate meeting directly affect the probability of another rate hike in July. It can be said that a rate hike in July is a high probability event. According to Xiaomai's personal experience, whenever the Fed chooses to suspend rate hikes, it usually has a positive effect on market sentiment. However, if it is only a one-time rate hike, it is obvious that the negative effect on the currency market is greater than the positive effect. Because once the rate hike is suspended in July, there will be no rate hike for three consecutive months, which will play a role in increasing market confidence. If the rate hike is chosen in July, market confidence will be shaken because the dot plot shows that the Fed still has the probability of raising interest rates.
The recent rise in Bitcoin is not due to the recovery of market liquidity, nor is there any new blood in the market funds and market participants, but is based on the capital market's expectation of the approval of Bitcoin spot ETFs. At present, there is no clear time for the implementation of this expectation.
The Fed predicts that the Fed's monetary policy will continue to tighten unless the inflation data at the end of the year is lower than expected. The meeting also pointed out that employment growth is strong, unemployment is low, the labor market is tight, economic activity is strong, and there is no clear sign that inflation will return to the Fed's target level. The Fed is very confident that it can bring inflation down, so it is speculated that the Fed is likely to choose to resume raising interest rates in July.
From a technical point of view, those who don't have spot still need to buy spot on dips, but they don't need to be fully invested. There is still a risk of callback trend in the future. Subsequent declines are opportunities. The price is still in the range of 31500-29500, but buying on dips is the best strategy and the most stable plan. Continue to buy on dips above 29500.