10/4 BTC market analysis:
With McCarthy stepping down, this week's non-farm payrolls will be more important than ever. U.S. Treasury bonds and the U.S. dollar continue to rise, and the global financial market is in danger! What is the bottom of the crypto market this time?
Hi, ladies and boys, welcome to Uncle Cat's Coin Talk. I wish you all a happy holiday.
As of the time of writing, Bitcoin is priced at around 27,400. After a surge and plunge in the early hours of Monday, the market continued to fluctuate sideways. This has been going on for two days, with trading volume continuing to decline and a strong wait-and-see sentiment in the market.
The 1-hour Bollinger Bands are gradually closing, and there may be a slightly enlarged amplitude. The amplitude can be referred to the 4-hour Bollinger Bands. At present, the 4-hour Bollinger Bands and the daily Bollinger Bands are basically in an upward pattern, and there is no change in the short term. Technically, bullish signals are frequently released, but smart people should understand that it is not the right time to make bullish profits in the market.
According to the futures market data provided by Mr. Ni on Twitter, the two gaps that appeared yesterday near 27740 above and 27120 below have not been repaired. Is there a possibility of repair? Can we use it as a reference? I will talk about it later.
Back to the news, after one night, the results of our analysis yesterday came very quickly. McCarthy, the leader of the US Republican Party, was removed from office. What is more interesting is that in the House of Representatives vote, 200 votes in favor of his removal came from the People's Party, and 8 votes came from the Republican Party. On the surface, McCarthy was removed from office by the votes of these 8 Republicans, but in fact, McCarthy was betrayed by his temporary allies.
McCarthy made a great contribution and concession to the US government shutdown. It can be said that McCarthy made a good move, but his temporary allies did not play by the rules. McCarthy's temporary bill avoided a 10-point US government shutdown, which in a way showed that he "considered the overall situation". The Democrats were also happy to see their opponents help them solve the problem. At the same time, McCarthy also wanted to win a better reputation for himself and establish prestige. As a result, the temporary ally, the Democratic Party, taught him a hard lesson in this vote.
McCarthy's resignation temporarily deprived the Republican Party of its leader, and there was no reason for the candidate to take over. The reason was that the mechanism of recall was still in place, and no one wanted to surpass McCarthy and become the shortest-serving leader in US history. Although this situation is a bit funny, for our financial market, the possibility of another shutdown in the United States on November 17th has increased. In fact, the US government shutdown is not a good thing for the entire investment market, but it may be an opportunity for the crypto market to make a breakthrough.
This week's non-farm payrolls data may be more important and sensitive than the data in the past six months. People who are familiar with me know that in the past two months, I am not optimistic about the US economic news stimulating the crypto market, because under low liquidity, the market is unlikely to have too much volatility. Why this time is particularly important actually depends on the current time node.
The US government avoided a shutdown, and the subsequent US dollar index and US debt continued to rise, causing the global financial market and economy to become miserable, and even precarious. In yesterday's data from the US Bureau of Labor, the number of jobs and labor mobility data in the United States showed that the increase in jobs has reduced the employment pressure in the United States. This data may increase the possibility of the Federal Reserve raising interest rates. After all, the Federal Reserve's interest rate hikes this year are mostly based on the number of employed people. Of course, the shortage of labor and the lack of labor efficiency in the United States are themselves a major problem. Of course, many people may say that the US Bureau of Labor is good at falsification in order to serve the Biden administration. It's really meaningless for such people to be serious. You don't care whether the data is false or not. It doesn't matter to us. What's important is whether it will lead to the Federal Reserve's interest rate hike. This is important to us. It's really meaningless to always compare the irrelevant truth and ignore the core of the problem.
Back to the point, the emergence of this data has led to a collective decline in the market, and traders on Wall Street are preparing to suppress the Fed's expectations of a rate hike. Of course, this is still in preparation, but if the non-agricultural data this week is again released with values lower than expected, Wall Street's expectations for the Fed's rate hike at the end of the year may increase significantly. This expectation may directly affect the panic decline of the entire investment market in the midst of tension.
Regarding the non-farm payrolls data this week, the Fed has revealed in recent speeches that it has increased its unemployment rate expectations, and even raised its 24-year expectations to 4.5%. In plain words, the Fed is not worried about the rise in unemployment. If your unemployment rate rises, I will raise my expectations. As long as it does not exceed expectations, I will have a reason to raise interest rates. This logic seems absurd, but it is true.
Don't underestimate the determination of the old men of the Federal Reserve. The Fed's recent speeches have been dominated by hawkish remarks. At the same time, the SEC has been holding on to the Coinbase and Ripple incidents, which clearly means that it wants to severely suppress the crypto market to protect its own government rights. The application for Bitcoin spot ETF has been postponed, which also shows that before the regulatory measures hoped by the US government come, it is difficult for the crypto market to get rid of the form of suppression. The approval of any futures ETF cannot change the status quo. Low liquidity has caused market makers to leave the market one after another.
At present, the US debt continues to rise, and the US dollar index follows closely. The global financial market and even the real economy market have been hit hard. The high interest rate has caused the US dollar index to suck blood from the global finance. The rise of US debt has also brought a heavy burden to the economies of various countries. Under such circumstances, the entire global economy and financial markets have become precarious. Of course, the US government will definitely not let everyone go because of compassion. Yesterday's article mentioned that the current fiscal deficit threat of the US government is very large. By pushing up the US dollar index, including US debt, it can not only suck blood from the global financial market, but also from major economies around the world. Notice that high interest rates have suppressed all currencies except the US dollar and consolidated the US dollar's dominant position in the world. It really kills two birds with one stone.
My personal analysis (conspiracy theory): The US government frequently puts pressure on the world economy. On the one hand, it is to suppress all economies except its own. On the other hand, I think that the US may also be waiting for the collapse under high pressure, which will bring about a similar "black swan" event or even a global financial crisis. If so, the US may gain more benefits in some areas that we cannot see.
Let's return to the crypto market that everyone is concerned about. I have said so much above, and everyone should understand that the overall environment in the future is not optimistic for the investment market, including the crypto market. Although the US government shutdown again may bring some opportunities to the crypto market, this is only a small probability problem. But overall, the crypto market is still not optimistic this month. Under the pressure of high interest rates, the liquidity of the crypto market can only be lower. If the announced rate hike this week continues to be lower than expected, the possibility of the Fed's rate hike will increase again, and the crypto market will accelerate its decline. Of course, although 26,000 seems to be a strong support at present, if a more sensitive event occurs, everyone can refer to the last time the market fell directly below 25,000 from 29,000.
Of course, there may be "historians" in the market who believe that Bitcoin has always risen in October in the history of the crypto market, and the increase is good. So is the trend of the crypto market this month more in line with history? Or more in line with the current situation? Uncle Cat personally believes that it is in line with the current economic situation. Of course, the continued rise of the US dollar and US bonds has greatly suppressed the investment market. The US stock market has fallen badly, and the crypto market will not escape the fate of being suppressed. I also said yesterday that there are still many chips in the market that have not been moved for a long time, and many institutions also hope to wash them out and absorb a wave of chips.
Of course, there is no need to be overly pessimistic. If all financial markets are suppressed and plummeted, I personally think that it is a good opportunity for the crypto market to overtake. Because the crypto market is young, light, and has many narratives and hype points, even if the future regulation is still in its infancy, the future of the crypto market is more malleable. If the Fed raises interest rates again, leading to global financial tension or panic, and all investment markets are suppressed, the first market that I can think of to bottom out and rebound is the crypto market. This young market still has certain potential. And I think that after this rebirth, the crypto market as a whole may go further.
Returning to the short-term market, trading strategy:
In terms of contracts, although we are currently facing the small non-farm payrolls tonight and the big non-farm payrolls on Friday, the market may fall below expectations as expected by the Federal Reserve, but due to the gradual contraction of the Bollinger Bands and the low liquidity, we must prevent a rebound effect of the main force or the market. At present, I personally see a rebound short. Of course, in terms of technology, I also refer to the upper and lower gaps in Mr. Ni's futures market chart. I personally think that these two gaps will first fill the upper gap and then fill the lower gap. Contract players can refer to the gap position in the above text to place orders.
Spot:
There is still not much to say. Make a list, set your expected price, and wait for the opportunity to build a position. Now is not a good time. The market has rebounded recently. I personally feel that some of the spot I bought before should be stopped at profit, so that the market will not go back and the profit will shrink. Another thing to remind everyone is not to have too much faith in this market. Even if you have a little faith, please give it to Bitcoin or even Ethereum, and don’t give it to those copycats. Many of the coins we choose to store are based on our analysis, but what will the future really be like? Who dares to say that he can predict the future? So these coins that should be stored should learn to divide the warehouse and build a position to enter the market. Leave some room for yourself, don’t go all in at every turn. Now I have a headache when I hear this word. Are they all money-spending boys who go all in at every turn?
Also, let me say one more thing. For many people, there is nothing to analyze in this market. They just bet on the size. If you have such people around you, please stay away from them, otherwise they will lead you to lose a lot of money. Even gamblers will analyze the gambling psychology and probability problems in the casino, not to mention the investment market. Such people think that there is no need for analysis. It is just that the content of these analyses is simply beyond their cognition, which makes them confused, unable to understand, and can only think that it is all bullshit. Just like telling an illiterate how brilliant the culture was in the past, he may think you are a fool. It is better to think about how to make a living by moving bricks and drinking two taels of wine today. People with different frequencies, please stay away from him and don't be led into the ditch.
I am too lazy to study the tokens on Binance’s gainer list today. The only ones that are active now are those that continue to sell when there is good news. Market makers also need money, or big market makers will come in to manipulate the market. I suggest that everyone spend the rest of the holiday in peace.
Finally, I wish you all a happy holiday, and thank you for following Uncle Cat’s Coin Talk.