What conditions are needed for mad cow to come?

When will the next unilateral rise begin?

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🫓The current market value of Bitcoin is 1.24 trillion. This amount of funds is no longer something that could be leveraged by retail investors or capital within the circle in 2017 or 2020.

- If web3 is likened to a bubble, the only thing that can continue to blow it up is the real world.

-In fact, since the last bull market, it has been linked with the U.S. stock market, the Federal Reserve's net liquidity index 🌐, etc. This is an inevitable experience when a crazy market reaches a certain size.

- In the past six months, we have always referred to past experience when analyzing the big cycle of Bitcoin, and many of the empirical conclusions we obtained have been slowly being falsified.

- The two most typical ones are that Bitcoin will never break a new high before halving. After breaking a new high, Bitcoin will continue to soar unilaterally and will lead to a copycat bull market.

- To be honest, as the market has come to this point, these two experiences have shown that for some retail investors I have come into contact with, there are many who waited for a half-cut in January but missed out on the opportunity, and who went all-in in March and unfortunately got stuck with 100,000. . .

⛷️Then how can we judge???

-When will the next <one-sided big market> start?

What will the trend be like in the next few months? 🔍

- Actually, I have been thinking a lot about these issues recently, and they are reflected in some articles, but they are mostly indirect. Now I want to do a more systematic review, so that I can have a deeper understanding of the current stage.

Let me first say the conclusion👇👇👇

1. The advent of a bull market is a necessary condition for the Fed to cut interest rates

2. BlackRock and other large institutions are the leaders of this bull market

3. The market has been volatile in the past few months

4. The next unilateral market will occur at the earliest in the fourth quarter

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⚡️Conclusion 1: The advent of a bull market is a necessary condition for the Fed to cut interest rates

First of all, we must understand that whether it is the cryptocurrency market or the U.S. stock market, liquidity is the baton that determines the rise and fall of any financial market.

- When liquidity is strong, most assets are skyrocketing. When liquidity is lacking, it is difficult for any market of a certain size to have a super market.

For example, in the year when the epidemic began, the U.S. stock market crashed and the cryptocurrency market hit 312. In order to save the market, the Federal Reserve directly lowered interest rates to 0.

What this means is that you don’t have to pay interest when you borrow money, you only have to pay back the principal.

- As a result, the market went crazy borrowing money from banks, and a large part of this money flowed into the financial market.

This is the liquidity basis and the most important reason for the U.S. stock market to break new highs and the cryptocurrency market to go crazy.

- After that, the Federal Reserve began to raise interest rates for two consecutive years, and the interest rate gradually increased to the current 5.25%-5.50%. As a result, people tended to deposit their money in banks, and the financial market continued to lose liquidity and naturally began to fall.

Therefore, liquidity is the core factor in the rise and fall of financial markets. If there is more money in the market, the market conditions cannot be bad, and if there is less money in the market, the market conditions cannot be good.

> Now you can understand why Bitcoin is rising 📈, while altcoins are stagnant 🦯

- Simply put, it is the result of liquidity imbalance. Since the Bitcoin ETF was approved in January, a large amount of liquidity has been injected into Bitcoin.

> Although the overall liquidity of the financial market has not improved qualitatively, it has increased for individual Bitcoins. To be honest, after the ETF is approved, money will flow into Bitcoin in a targeted manner. Apart from the impact on emotions, what does it have to do with your altcoins?

- So, the market is now showing a mixed picture. What we cannot explain empirically can be analyzed very simply and clearly using liquidity.

〽️For friends who are concerned about Bitcoin ETF, they will find some problems.

Although BlackRock has been buying and Grayscale has been selling, the net inflow of the ETF so far is only 8.7 billion US dollars, which is only worth about 130,000 bitcoins. How can it have such a big impact❓❓❓

🪁What needs to be explained here is that after the ETF is passed, it is not only Wall Street that injects liquidity into Bitcoin. Local capital in the currency circle, as the current largest force, is also increasing its holdings. Many big funds are doing big cycles, and they will only buy Bitcoin at this stage.

During the bull market phase, all altcoins except Bitcoin will soar, and in order to achieve this goal, injecting liquidity into altcoins is a necessary condition.

- The funds of ETFs will not overflow into Bitcoin at all. Even if it drives up the price of Bitcoin, it will provide more emotional value to altcoins. The current market also proves that the rise caused by emotions cannot last long.

- When the Fed cuts interest rates, funds from banks to the market can inject liquidity into the overall market, and all types of assets will have a solid foundation for growth.

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⚡️Conclusion 2: BlackRock and other large Wall Street institutions are the leaders of this bull market

I have mentioned this statement before. When any market reaches a certain size, it is essential that real capital take over to inflate the bubble.

The most important condition for allowing Wall Street to take over is the transfer of dominant power.

The manifestation is that the bigwigs in the cryptocurrency circle have begun to retreat behind the scenes, handing over the power to guide the market direction to Wall Street.

-CZ now chooses to plead guilty, and Binance is willing to pay a fine and accept supervision for this reason. They can allow you to make money, but if you dare to touch power, you will die. You let them get what they want first, and then they can give you what you want.

🫦 I am arbitrary. Bitcoin has a high acquisition cost as a mining asset, a fixed total amount, and is highly recognized worldwide. Now Wall Street is willing to take over, and it is definitely not for the sake of making a small profit. In the next 20 years, this bubble may really be blown up by them to be no less than gold. Because although gold is scarce, its total amount is also higher. Scarcity makes things more valuable, and Bitcoin is obviously more scarce.

Among all of this, everything from prices to the promotion of consensus worldwide is guided and completed by big capital such as Wall Street.

Whoever has money and power will be the dominant one, so they will dominate the direction of the cryptocurrency world not only in this bull market but also in the next few decades.

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⚡️Conclusion 3: The market has been volatile in recent months

Through the above analysis, we should understand that the premise of the bull market is the Fed's interest rate cut, and interest rate cuts require the cooperation of many conditions. At the macro level, the position of these conditions in meeting the standards for interest rate cuts fundamentally determines the market trend.

Regarding this part, I would like to list some points👇👇👇

1. The crypto market is closely related to the liquidity of the US dollar. The biggest macro factor for the short-term rise and fall of assets like Bitcoin is the amount of US dollar liquidity. At present, the liquidity is fluctuating at a high level, so it is very difficult for the crypto market to be independent, and it is likely to continue to maintain linkage.

2. After inflation improved at the beginning of the year, it has not been able to fall as expected. Powell and Yellen cannot allow inflation to get out of control again after spending so much money to control it for several years. Only after inflation has been under control for a period of time will interest rate cuts really begin, and now is obviously not the time.

3. The current US economic data is very good, and even at high interest rates, the economy is extremely resilient. However, this is a bad thing for liquidity. In other words, the market does not need a rescue, and if there is no rescue, there is no need to cut interest rates or release liquidity.

4. This is a strategic goal. The United States has always liked to reap the world by raising interest rates. After the Fed raises interest rates, the US dollar appreciates, and the currencies of other countries will depreciate accordingly.

They can use their more valuable US dollars to exchange for more foreign currencies to buy other countries' assets at the bottom. During this period, the Japanese yen obviously couldn't hold up, and the exchange rate of the Japanese yen against the US dollar continued to fall, and many assets were bought at the bottom. If the economy mentioned in the third point is not in trouble, then maintaining a higher interest rate for a longer period of time will obviously benefit the United States more.

5. This is the key point of the cryptocurrency circle. In the past four months since the data was disclosed, the main participants of ETFs are retail investors in the United States. Institutional control, such as government pension funds, have been discussing what Bitcoin is, whether to buy it, how much to buy, etc. Now the power of retail investors has reached its limit. Institutions may not really start to buy the bottom of Bitcoin until the second half of the year. The period in between is a vacuum period, and the rise and fall is not very meaningful. Sideways fluctuations are the most reasonable choice.

Regarding the fifth point, I mentioned earlier that Wall Street is the dominant player. Bottom-fishing is definitely good for the market because it can bring liquidity. However, I am not sure whether the bottom-fishing by institutions will lead to a surge in Bitcoin. Because institutions are different from retail investors, they are very disciplined. They will not buy more and more as the price rises, and rush up like retail investors. Often, when institutions are accumulating funds, the price performance is sluggish or even continues to fall. As the dominant player in the next few decades, I think there is no reason for them to start pushing prices up during the accumulation period. This is also a basis for my judgment that there will be sideways fluctuations in the next few months.

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⚡️Conclusion 4: The next unilateral market will occur in the fourth quarter at the earliest

I will also list my reasons for this conclusion in points 🌪️

1. The inflation situation in the fourth quarter may drop to a level that meets the requirements for interest rate cuts, which will start a large cycle of interest rate cuts and inject liquidity into the market.

2. In the US election on November 4, Biden is not as good as Trump now. The Federal Reserve may cut interest rates to help Biden get re-elected.

3. After a period of accumulation of funds, institutions have the chips to pull up the market, and more and more institutions are entering the market, which is also of great benefit to liquidity.

In fact, in a sense, I prefer that the bull market will really start in the first half of next year, it is still a little early this year. The fourth quarter is the earliest time period that a one-sided market may start, but it is highly unlikely to be the real start of the bull market.

The current data has not been very good for several months. If inflation rebounds again, the conditions for interest rate cuts will still not be met. This year, interest rate cuts may be less than three times. Moreover, for these large institutions, the three or four-month fund-raising period is still too short. It would be more relaxed if the period was extended to more than half a year.

If the cycle is magnified, now is more like the stage from the beginning of the bull market to the middle of the bull market, because the Federal Reserve has cut interest rates and institutions have participated in purchasing ETFs, but these things that really activate liquidity have not yet begun.

If liquidity doesn't even go up, how can it be a real bull market? Now what everyone needs to do is actually very simple, just add positions when it falls to 60,000 or below, and wait for institutions to really start leading the big unilateral bull market. When you look back next year, now it seems like a bottom consolidation, and you will make money forever by doing big cycles. #5月市场关键事件