Article source: Talk Li Talk Outside
In the article a few days ago, we mentioned that this month (May) will be a relatively important week from two perspectives:
From a technical perspective (K-line), the trend of the weekly level in these weeks is generally good. Currently, the MACD indicator has also appeared with a new crossover. If the market can continue to provide green candles in the next two weeks, we may really welcome a new round of upward trend in the next month (or the month after next), and Bitcoin might even have a chance to approach or break through its historical high again. As shown in the figure below.
From a macroeconomic perspective, the market currently has many uncertainties, including the apparent slowdown of US economic growth throughout the year, core inflation not showing a significant decline, market (including Trump) continuing to pressure, but the Federal Reserve currently does not seem to have a clear intention to cut rates, and the political situation in some countries/regions remains tense... and so on.
In plain words, the current market looks interesting and tangled.
Technical side says: I might start rising!
Macro side says: I want to do something, but haven't figured out how!
Analysts say: It's either going up or down, or sideways, don't chase high and try to avoid miss the pump.
Retail investors say: My mood is not very good right now, I don't want to talk much, and I don't have much passion.
However, we will still continue to maintain the basic viewpoint from previous articles: Under the premise that no major black swan event occurs, the crypto market may still have a new round of staged bull market opportunities, but it will most likely continue to belong to Bitcoin's bull market (New Bitcoin Era and Mini Altcoin Season), and Altcoins should not have comprehensive opportunities, meaning only a few Altcoins under certain narratives might have a good follow-up trend, unless market liquidity (mainly focused on Federal Reserve rate cut expectations) or policies (such as US crypto-related bill advancement or policy issuance) fundamentally change.
1. Regarding the Federal Reserve Rate Cut
Currently, everyone is probably most concerned about the Federal Reserve's May rate decision to be announced tomorrow morning (Beijing time, May 8th), which seems to be another difficult choice for Powell, with market and Trump pressuring for rate cuts on one side, and the Federal Reserve seemingly wanting to maintain rates on the other.
Actually, from a neutral perspective, the Federal Reserve is indeed facing a rather poor situation where maintaining rates or restarting a rate cut cycle doesn't seem to be the ideal choice. However, based on current market expectations, the Federal Reserve should continue to hold steady, i.e., postpone rate cuts.
But some institutions are relatively optimistic, predicting that the Federal Reserve might cut rates 3 times this year in July, September, and October, lowering the federal funds rate to 3.5–3.75%.
Since the market basically has expectations for tomorrow's Federal Reserve meeting (95.6% probability of maintaining current rates), this matter has likely been digested in advance, and the specific announcement result should not significantly impact the market. We don't need to focus on the final rate result for this Federal Reserve meeting; perhaps Powell's speech content will be more meaningful for the market's subsequent trend.
Although on the surface, Powell always says inflation remains high and the Federal Reserve is not eager to cut rates, recent Federal Reserve actions (such as slowing down balance sheet reduction) suggest they are trying to make some changes.
We need to further explain that market price influences are often based on expectations, not specific published numbers or results (what many call "buy the rumor, sell the fact"). In short, considering the current comprehensive situation, the Federal Reserve's stance seems to be becoming increasingly moderate, which might be seen as an early signal of liquidity returning.
2. Market Reaches Another Critical Moment
In the short term, the market may still have some uncertainties, but in the long term, these uncertainties also contain some opportunities.
After Bitcoin successfully broke through the $86,000 resistance last month (April), prices have been hovering in the $92,000-$97,000 range in recent weeks. Although it once broke through the $95,000 resistance, it subsequently fell back several times. As of writing this article, Bitcoin's price is temporarily maintained around $96,000.
Currently, the market seems to be waiting for Powell's speech tomorrow (Beijing time), which will determine the market's directional trend in the next few weeks. If the speech is moderate, it will likely usher in a new staged breakthrough, such as Bitcoin continuing to challenge the $99,000 position.
Of course, if Powell doesn't follow the routine and maintains a firm Hawkish stance, the market might welcome a new staged fluctuation, facing a liquidity panic crisis.
Under the current market sentiment, if your investment risk appetite is not high, the most prudent method in the short term is still to maintain sufficient cash liquidity, don't rashly All In or go full position. Only when your position makes you comfortable, able to advance and retreat, can you better face possible market fluctuations.
In other words, opportunities and traps sometimes appear simultaneously. Unless you are a very determined long-term, coin-based hodler, it's best not to go full position during a bull market (currently). Protecting profits is more important than gaining more risky profits, otherwise, you might continue to miss greater opportunities in the next cycle.
I remember a friend in the group shared a passage a few days ago, roughly meaning: Many people's first bull market is used to lose money, the second bull market is used to break even (recovering losses from the first bull market), and the third bull market is used to make money.
This sentence might truly represent the real experience of some people. Actually, for a long time, our advice has been to encourage everyone to think rationally about their purpose for entering this field: Are you treating cryptocurrency as a business for investment? Or participating in gambling with carefully crafted lies by yourself or others?
If the purpose is investment, then you should return to the basics of investment:
- You need to create a learning framework
- You need to customize an investment system or strategy suitable for your position
- You need to strictly follow and execute your trading discipline
- You need to try to reduce trading frequency (e.g., try reducing daily trades from N times to once a week)
- You need to do some other things you're interested in (like taking notes, writing, organizing and making charts, or even getting a massage, etc.)
In short, the crypto field is not difficult; what might be challenging is your inability to form your own logic and break bad habits. Instead, try to minimize unnecessary distractions (such as the impact of hundreds of messages/news on yourself daily, and following dozens or even hundreds of bloggers to hear different opinions), start following your own principles, and find inner peace, reducing the emotional impact of market fluctuations.
As long as you remain in this game, you will not lack opportunities. Abandon the fantasy of getting rich overnight or quickly, do not try to win rapidly, just grasp the major trend of the cycle, and do not be afraid of failure. You can conduct trading experiments with small positions that you can afford to lose.
Article source: https://mp.weixin.qq.com/s/spP6O64Ch5efMb-aONsB3g
