I saw that the US retail data was disappointing again yesterday, with a month-on-month change of 0%, which was significantly worse than the expected 0.4%. At that time, I was still holding 2 $BTC, and my heart skipped a beat, so I quickly checked the K-line, and sure enough, funds were secretly pushing the price up in the early morning.
To put it bluntly, this means: American stores are unable to sell goods, indicating that the common people have no money, are hesitant to consume, and the economy is cooling down. The Federal Reserve saw this and realized it couldn't continue to raise interest rates without risking an economic collapse, so expectations for interest rate cuts and liquidity injections suddenly surged.
I told you this is related to the cryptocurrency circle:
1. When money increases, cryptocurrencies become valuable.
An interest rate cut means 'easing,' which increases the amount of dollars in circulation, making money less valuable. When people have more idle cash, they think about investing, and in a high-risk, high-reward place like crypto, it naturally becomes a hot commodity. I have a friend who just moved 30% of his position from U.S. stocks to $ETH last week; he said he is betting that the Fed will cut rates at least twice this year.
2. When the dollar weakens, Bitcoin strengthens.
Bitcoin has always been referred to as 'digital gold,' maintaining an inverse relationship with the dollar. When the dollar depreciates, people buy Bitcoin to preserve value. The last time the Fed hinted at rate cuts, Bitcoin surged from $40,000 to $70,000. Given the poor data this time, I think it can at least touch the resistance level of $65,000.
3. When the sentiment is right, the funds will come in.
The crypto market is an emotional market, and the worst thing is having no news. Now that retail data has come in cold, it has given the market a clear expectation of interest rate cuts, and everyone's confidence has suddenly returned. I saw many people in the community yesterday, who had previously liquidated their positions, asking, 'Can we buy the dip now?' Once this sentiment ferments, funds will naturally flow in.
Of course, we can't just look at the positives; we have to mention the risks as well:
If the upcoming non-farm payroll data exceeds expectations and the Fed changes its stance to not cut rates, then the crypto market will be pressed down hard.
- If the U.S. SEC stirs up trouble again, like freezing a few exchanges, then no amount of good macro data can save the market.
My own strategy is to hold onto my $BTC for now and reduce my position by half when it hits $65,000, securing my profits. After all, in the crypto world, surviving is more important than anything else.
