Plan ahead for next week’s market over the weekend. First, a disclaimer: Lao K has always believed that following the trend matters more than trying to predict it in advance, but some signs have already emerged. It’s necessary to remind everyone to be prepared and take precautions early. The following is Lao K’s personal bias; it may be wrong and get slapped, but it’s based on reasonable grounds. Overall, my view is that next week Bitcoin will most likely see a deep drop, gold may fall mildly, while the Nasdaq could move in the opposite direction and rise in a range-bound upward trend.

Bitcoin weekly: the gravestone pattern appears, the rally has been put on pause

Look at the Bitcoin weekly chart. After last Monday’s single long bullish candle, the price was blocked at a key resistance level—this is exactly the crucial supply zone that trapped many people who went long after breaking out in May this year, and it also formed a gravestone-like candle at the weekly level, carrying some momentum for a pullback. Although the weekly candle won’t close until next Monday morning at 8:00, weakness is already evident here. The rally should have been put on pause, and there’s even a possibility of a deep drop.

Looking back to August 16, Old K had been saying that this area might be a false breakout. That day, sure enough, there was a false breakout. Many partners rushed to short then, but market sentiment needed time to incubate and digest. There were already plenty of people up above eager to short as well. Old K advised everyone to stay calm, wait for the market to form parallel or even higher highs, preferably with a one-hour level MACD top divergence, and then enter on the next high-volume bearish candle breakdown. That way, both the speed and timing of profits were better. Yesterday’s move was one we captured—back then Bitcoin was around $79,300, and our short orders we placed near $80,000 are already in profit in the group today. If you’re interested in trading together, you can find us via the details page.

Nasdaq: 29,500 defended and stabilized—an upward, choppy move is in the cards

The Nasdaq also had a false breakout earlier, but after last Monday’s big bearish candle, it got support at the key defense level of 29,500, and the second half of the week saw a steady rebound. After yesterday’s close following the more hawkish tone released at the Jackson Hole meeting, the index is still above 29,500. Next week, there’s an expectation of further choppy upside.

Yesterday, the Nasdaq fell despite being affected by Fed Chair Powell’s speech, but the drop was only 0.5%—not deep. Here’s what to note: the Nasdaq isn’t only AI stocks. Apple edged up yesterday, and Google has both AI characteristics and medium-to-short duration traits. The semiconductor sector saw a larger decline; AI names like Nvidia fell 1 to 2 points, but gold dropped 3 points in a single day—behind this are differences in how various assets are sensitive to interest rates.

From the duration perspective: understanding an asset’s interest-rate sensitivity

What is duration? It’s how long it takes to recoup the cost. For assets with no cash flows—like gold and Bitcoin—from a traditional perspective they have infinite duration. Concept-driven items like semiconductors, which lead and have not yet generated much value recently, are high-duration. Apple, energy stocks, and bank stocks are medium-to-short duration: their cash flows show up faster, so the time to recoup costs is quicker and the upside valuation expansion is relatively limited.

The asset types most sensitive to a rapid rise in short-term rates are those with effectively infinite duration—gold and Bitcoin. Gold had been moving up, and after a rapid drop, it still has some profit room; it reflects the highest sensitivity and has already dropped quickly into an important range. Bitcoin is also affected a lot, but it hasn’t fallen into a particularly critical range. In the bigger structure, we still need to observe subsequent price action around $75,000 and $70,000—so the probability of a deeper drop remains fairly high.

Jackson Hole’s “ghost story” and the Treasury signal

Old K had been ranting about it for a while, reminding everyone to watch out for the Jackson Hole meeting’s “ghost story” session. The public community also pre-announced that the “big pie decline is on the way.” Sure enough, the meeting covered three things: first, the 2% inflation target must be extremely firm; second, there’s no ceiling on financial conditions, which means rate hikes are still on the table; third, they praised AI stocks.

After the talk, U.S. Treasury yields jumped across the board. The 10-year yield rose 3.97 basis points, and short-term rates climbed even more—rate-hike expectations for September surged from just over 30% to 57%.

AI stocks and Nvidia: earnings support offsets valuation pressure

Remember this formula: price equals earnings multiplied by valuation. Valuation is the denominator effect, influenced by the discount rate, growth potential, and cost of capital. The core is the discount rate—that is, the long- and medium-term risk-free rate. But earnings are also important. The core profit, earnings quality, and earnings growth are all key indicators.

Good timing, coincidentally. This Wednesday, Nvidia’s guidance showed strong earnings expectations: Huang Renxun said that the compute power usage for AI agents will be 10 to over 100 times that of humans. On the technical side, Nvidia has already formed a pattern of “bottoming and raising,” and “topping and raising.” The Nasdaq overall has also held the defense line. Next week, the bad-news items have been gradually released, and the August CPI data hasn’t been announced yet in the short term. If August CPI month-over-month growth doesn’t exceed 0.1%, rate-hike expectations could return to the 30% range—so that’s a variable. Don’t let one piece of news scare you. Macro data won’t really show its impact until mid-September. In the short term, market bad news has already been fully digested. Those smart money in U.S. stocks are extremely sensitive to the market. The probability of a “catch-up selloff” is low, and their reaction will certainly be faster than you or me. The market has already priced it in.

Bitcoin target levels: $76,000, $75,000; extreme level $71,000

Back to Bitcoin. Now we’ve come to a left-side small timeframe low. If the move is done and digested, it should rebound quickly—but it didn’t. Of course it has to do with the weekend, but since it still shows weakness: earlier there were mostly long bullish candles, and yesterday we saw a bearish candle. Yes, panic selling played a role, but after that, there wasn’t a rapid rebound with a high-volume big bullish candle. The structure on the small timeframe has already shifted—lower lows have been created. If next it creates even lower highs/lows (for example, filling this line), then the probability of continuing downside is high.

Using Fibonacci measurement, the right-side peak retraced about 50%. The primary level to watch is $76,000. Next, the 1.618 extension is roughly at $75,000—this line will very likely face major tests. The relative extreme level is $71,000. If it breaks, it could accelerate the selloff, but that line will most likely hold. Judging from current trading volume, Old K still insists that going long with low leverage is the main strategy—but you don’t go long here. If people who missed the trade think it seems stable and want to buy now, remember: this is a flying knife. Next, it will most likely move a bit lower again.

Gold: after disciplined stop-losses, it may be time to buy in the range

Gold fell so violently yesterday. Gold is also an infinite-duration asset, so typically its percentage moves aren’t as vicious as Bitcoin’s—but yesterday’s drop shows extremely high sensitivity, and it also suggests many institutions carried out disciplined stop-losses after the 200-day moving average on the daily chart was broken. Has the market already digested the bad news enough? Old K thinks it’s very likely yes. And it’s also come to a relatively important defensive position—this is also a fairly large gap. The prior rally wasn’t that exaggerated either. So is it worth buying when arriving at this range? Old K thinks Bitcoin still isn’t ready, but gold likely has.

That’s the analysis for today. Hope it helps you. If you want to keep up with the real-time trading rhythm, feel free to contact us via the details page. See you next time.

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