Overnight BTC Formed a Doji: A Precise Gauge of Market SentimentLast night, before the US inflation data was released, BTC surged briefly to $58k. However, within two hours of the inflation data release, bears attacked, pushing the price down to $55
Overnight BTC Formed a Doji: A Precise Gauge of Market Sentiment
Last night, before the US inflation data was released, BTC surged briefly to $58k. However, within two hours of the inflation data release, bears attacked, pushing the price down to $55.55k. Subsequently, bulls fought back fiercely, reclaiming the $58k high by early morning. This rollercoaster ride once again showcased the complex and volatile nature of the market, reflecting the Fed's skillful approach in guiding market sentiment.
First, in the first debate between Trump and Harris, Trump appeared slightly weaker, which was obviously not good news for the crypto industry that has recently been banking on Trump's crypto adoption. Secondly, the US August inflation data released late at night showed a significant decline in overall inflation, but a slight rise in core inflation. This caught off guard those bulls who were betting on a decline in overall inflation and a surge in BTC; their logic did not keep up with the pace of Wall Street.
Wall Street believes core inflation is more worthy of attention, as its rise indicates persistent inflationary pressure, which could potentially limit the Fed's ability to cut interest rates significantly. This judgment is generally negative, i.e., bearish.
The Fed has made its stance clear: inflation and employment are its top priorities. Low inflation, without hurting the economy, allows for rate cuts, a sweet bonus. Poor employment, leading to a recession, necessitates rate cuts, a bitter sweet situation. However, a sweet bonus may be sweeter, while a bitter sweet situation may remain bitter.
The data released by the Bureau of Labor Statistics was half sweet, half bitter, tilting towards the bitter side, leaving the power of life and death in the hands of the Fed. The Fed undoubtedly saw the data earlier than the market, and more.
However, bears who bet on a steep decline also miscalculated. Sweet with a touch of bitterness, although it tastes bitter, it still holds a touch of sweetness. The Fed's "limited ability to cut rates significantly" does not mean no rate cuts. In order to guide market sentiment and avoid negative interpretations of no rate cuts (tightening, bearish) or significant rate cuts (recessionary, bearish), the Fed went to great lengths to subtly hint at the possibility of -25bp (loosening, bullish + no recession, bullish).
The market understood the Fed's efforts and responded enthusiastically with a significant rebound. Huang Renxun also seized the opportunity to release positive news, directly reversing the Nasdaq's decline and leaving the bears scrambling. This is the true meaning of bulls and bears both going bust.
The Fed is undoubtedly the master of understanding the psychology of the masses. Market movements are volatile, unreasonable, yet they must be correct. The method of taming the market is to remain unchanged in the face of change.
Our eight-character mantra: stick to regular investment, accumulate on dips. Those who are overly confident to the point of arrogance, believing they can beat the market by buying low and selling high, have all been taught a harsh lesson by the market.
A relatively safe way to test your ability is to practice accumulating on dipsunder the low-difficulty requirement of only requiring one-sided buying, try to see if you can accurately buy at the bottom every time? If you can't even accurately grasp the bottom in a one-sided buy, then in a complete closed loop that includes "buying at the bottomselling at the top," you are certainly going to find it even harder to accurately sell at the top.
If you can't guarantee buying low, and neither can you guarantee selling high, then you will become the opposite, buying high and selling low. And buying high selling low, inevitably leads to losses.
Furthermore, since the market must be correct, your losses must also be correct. Correctly profit, correctly lose. Don't try to reverse losses. Since losses are correct, they are not susceptible to reversal. Let go of the obsession with profits, abandon the correctness of losses, recognize your mistakes, and start trying the correct method to achieve profits, and profits will naturally follow.
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