Cryptocurrency market outlook

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We clearly believe that this rally is nearing its end, BTC is currently in the top area of the rally, and the market risks far outweigh the opportunities. It will still take several months for the bull market to kick in.

After the end of the crypto bull market at the end of 2021, the market experienced a full year of sharp declines in 2022, and after a successful bottom in November 2022, it began to rebound in early 2023, with BTC range rising by more than 150% and rebounding for more than 12 months. Above the current price, it belongs to the chip-intensive area, and the pressure of the hedging plate is huge. In our view, both in terms of time and space, the rebound is the end of the crossbow.

On the impact of the ETF’s expected approval:

In the long run, it’s definitely positive. The entry of traditional capital will greatly enhance the liquidity and stability of the cryptocurrency market. In the short term, if it is approved in the near future, it is very likely to lead to a reversal of capital expectations, which will turn positive into negative.

About the impact of the BTC halving event:

At present, the number of BTC mined is about 19.56 million, with a total of 21 million. 93% of BTC is already in circulation, and the impact of the halving event on the market sentiment is far greater than the substance.

On the impact of Fed rate cut expectations:

There is no doubt that the Fed’s monetary policy is the master switch of the global financial market, and its influence is huge. At the same time, it should be noted that the market also has an internal rhythm. The specific point of the Fed’s interest rate cut is unknown, and there is a high probability that it will not cut interest rates in the near future. It is unprofessional and unreliable to take the Fed’s interest rate cut expectations as the absolute basis for the start of the bull market.

Suggested actions:

To sum up, we believe that the cryptocurrency market will fluctuate and adjust for a long time in the future, and the risks far outweigh the opportunities. Our suggested response strategy is to remain cautious about the market and wait patiently for BTC and ETH to return to a reasonable area before making a layout.

The author of this article is a senior trader and partner of an asset management institution, who has worked in a top macro research team in China and holds a master’s degree from Columbia University.

Source: Golden Finance