February 11 Market Morning Read
$BTC The sky has fallen, brothers. Yesterday's CPI data exceeded expectations, directly pulling the 'water' out of the market. Last night, the January CPI year-on-year rose to 3.0%, higher than the expected 2.9%, and month-on-month it soared to 0.5%, the most intense since September 2023.
This means inflation is rising again, and the probability of the Federal Reserve cutting interest rates in March has dropped to 2.5%, with the total number of rate cuts for the year significantly adjusted down by the market.
For the cryptocurrency world, this is the 'blood extractor': the US dollar strengthens, US Treasury yields soar, and funds are fleeing from risk assets like cryptocurrencies and US stocks, directly crashing the market.
There's another thing that everyone may not know: Tether has been quietly reducing the supply of USDT. According to statistics, there has been a reduction of 6.5 billion USDT in recent months. For the market, this is another blow. At the beginning of January, USDT was at a historical high of 187.3 billion USD, and by February 12, it had dropped to 185.6 billion USD. Tether has also burned 3.5 billion USDT on the Ethereum chain, one of the largest continuous burns in history.
USDT is the 'blood' of the crypto market; a reduction in supply means weakened buying power. With no one to take over, prices naturally cannot hold.
Additionally, with Hong Kong clearing USDT and funds leaving the cryptocurrency space, liquidity is directly tightened in two ways, making it difficult for the crypto market to rise.
Yesterday, under the double blow of CPI exceeding expectations and a contraction in USDT supply, the market directly broke through the 68000-72000 range, hitting a low of around 65700. The 'double test' mentioned yesterday has landed, and now the bears completely hold the initiative, and in the short term, it still has to grind downwards.
From the 4-hour chart, the rebound highs are getting lower each time, and the bulls' confidence has been completely shattered. The next high probability is to test the key support at 65000. If it cannot hold, the next target will be 63000.
Operational Advice:
$BTC 68500-69000 Light position to short, stop loss at 69300
$ETH 1990-2010 Light position to short, stop loss at 2025
For long positions, just focus around 65000; still, the same advice: watch more, act less, and save some money for the New Year🧨
