Federal Reserve to Announce New Measures, Impacting Currency Direction

Madman says...

The Federal Reserve Chairman will announce new measures related to monetary policy tomorrow. Based on the current economic situation in the US, the future currency direction will be proposed, which will further affect the trend of the US dollar index, gold, stocks, and Bitcoin. In the minutes of the currency policy meeting 6 days ago, Powell hinted at no further loosening based on economic growth, which led to a surge in the US dollar and a drop in stocks, gold, and Bitcoin. Therefore, the madman expects that inflation expectations will significantly weaken in tomorrow's Fed plan, which is one of the reasons for the continued weakness in US stocks and Bitcoin. We wait for the news to land and if the negative news can cause panic, it will be an opportunity for short-term bottom fishing.

The impact of the Federal Reserve's continued flood of money on Bitcoin is crucial, as traditional giants hedge inflation risks through Bitcoin, unemployment benefits in the US flow into Bitcoin, and the correlation between Bitcoin and gold remains historically high, indirectly causing volatility in Bitcoin.

Bakkt's trading volume broke a new record again, with a daily turnover of $140 million, indicating a greater possibility for the cryptocurrency circle in the future as institutional investors continue to increase.

The US Internal Revenue Service warns US cryptocurrency holders to pay taxes, which is a major negative for the entire cryptocurrency industry. The tax law is not conducive to the continued upward trend of the market because Americans are honest and will either pay taxes or give up holding tokens. Similarly, South Korea and Russia also call for tax payment, but their people's honesty is far from that of the US, so the impact of tax laws is not significant and can be ignored.

Bitfinex's bullish positions in Bitcoin decreased by 10,000 coins since 312, and the long-term and short-term ratio of Bitfinex contracts has remained at 80:20%. Bulls have been reducing their positions since the beginning of the month, and the drop in their holdings is more than 30% from the high. It is not a good signal and deserves attention!

In the overall context of unfavorable data and news, the madman suggests continuing to watch the market. From above 12,000, the madman repeatedly advised everyone to reduce positions and explained that the first phase of the upward trend ended and entered an adjusting phase. It is difficult to have a new high in the short term. This status will continue, and risk control is always the top priority in the rough seas. It is better to miss out than to make mistakes.

Market analysis:

Bitcoin:

The retracement volume is not large today, and it is retreating to the support level of 11,100 in the early period. The probability of directly breaking through is not high, unless some negative news surfaces, such as the Federal Reserve's monetary tightening (otherwise, it may rebound significantly).

Therefore, in the short term, the cryptocurrency price will continue to fluctuate around 11400. The overall trend is still in the adjustment process, and there is no need to rush to buy. Be patient and wait for opportunities.

ETH: There is some expected rebound in the short term, but the amplitude is limited, with resistance at 400.

HT: It is expected that this trend of HT's independent market will continue as the demand for platform coins is expected to increase with the continuous popularity of Defi in August and the profitable trading fees of exchanges. Secondly, the upcoming release of HT public chain in Q4 will fundamentally change the supply and demand relationship of HT. Therefore, be cautious as such anticipated coin prices often sell off after good news.

LINK: After a strong rebound from the morning's bottom, it is expected to continue trending upwards with this support. However, be cautious with short selling.

LTC: There has been a special increase in interest in Litecoin (LTC) from some V. Be logical when trading cryptocurrencies and do not blindly follow others' signals. Do not participate if you have no expectations.

ADA: The recent increase in prices for ADA seems a bit unstable, and those gains may not return.

TRX: The rate of decline has decreased, and there is some expected rebound in the short term, but space is relatively limited.

ZEC: The correction seems unfinished so it is advised not to participate.

DOT: The strong rise of DOT exceeded expectations. Yesterday, a large amount of funds sold to reduce positions at high positions, but others quickly entered to fill the gap. DOT's market value has only taken six days to surpass those of older public chains like EOS, ADA, and XTZ, so be wary of the risks and avoid buying more.

Market cycles are periods when risks outweigh opportunities. Rest well during these times and only participate in high probability events to obtain a stable return. Participating against the trend is either death or injury, so be wise and patient. The views expressed in the article are the author's personal opinions and do not represent those of the publication or any investment advice. Investors should make their own decisions and trade at their own risk. The author and publication take no responsibility for any direct or indirect losses incurred by investors.