The market has plunged again, can we still bottom?

While the market has continued to rally over the past few days, DEFI and centralized exchange stablecoin yields have hit a new low for the year.

The market has plunged again, can we still bottom?



The market finally rallied with a vengeance after the panic market completely cleared out. In just four trading days, most mainstream coins rose by more than 50%, and investors who bravely took the bottom on May 24 basically made a lot of money. As the market continues to push short, the classic theory of three positive lines changing beliefs is once again verified by the market. Since yesterday, the market bearish sound almost extinct, especially after Biden scale 6 trillion dollars fiscal stimulus package was reported by the media, the long feverish sentiment began to return to the level before 5.19. So has the market reversed?

01/strategy analysis

While the market has continued to rally over the past few days, DEFI and centralized exchange stablecoin yields have hit new lows for the year. Looking at the publicly available data over the week, OKEX’s Yucoinbao’s USDT returns fell 90%, Coinbao’s USDT returns fell 35%, and Compound’s USDT lending rates fell 70%. This shows that there is abundant liquidity in the market, but most of the funds are flowing to the low-risk and low-yield areas, and the market’s risk appetite has gone down. If the market demand for USDT does not pick up next, then the excess USDT will gradually flow to the off-exchange, which will further squeeze the premium of USDT. Once USDT shifts into discount mode, the market will enter a phase of reduced volume gaming. Therefore, it is still too early to talk about a reversal.

As this regulatory voice is of such a high level and harsh wording, which is rare in history, it cannot be ruled out that the top-level design ideas for cryptocurrency regulation have been formed. And the Chinese capital market has always been characterized by such a strong regulation without a bull market. This is also the reason why on May 21, a large number of sell orders in the OTC market smashed the market regardless of the cost. The reason for the heavy losses of many people in this round of decline is the excessive superstition in the theory of U.S. pricing, ignoring the impact of Chinese factors on the market. As it turns out, a sneeze from China will shake the entire cryptocurrency world. Therefore, we still need to pay close attention to how the regulation will develop subsequently.

In the process of market decline, there is nothing more comforting than the fact that American industrial capital did not sell BTC, and even some industrial capital also increased its holdings against the trend. Public data shows that during the decline, MicroStrategy spent $10 million to plunge 229 bitcoins, buying at an average price of about 43,668. Ark Investment plunged 516,001 shares of GBTC on April 24, and then plunged 181995 shares of GBTC on May 25, increasing its holdings by a cumulative amount of about $22.7 million. Chainanalysis’ on-chain analysis report shows that the giant whale bought 77,000 bitcoins, worth about $3 billion, during the bitcoin crash. TheBlock’s report also notes that hedge funds and custodians are buying bitcoin in large quantities between $30,000 and $35,000. So in the medium to long term, bitcoin under 35,000 remains very attractive.

Last night, Biden’s proposed $6 trillion fiscal stimulus once had the market heating up quickly with enthusiasm for going long. However, this fiscal spending proposal, the largest since World War II, failed to excite U.S. stocks and blow up ripples in the coin market, why? Unlike the past direct money to the people, this budget is more invested in infrastructure, while about 3 trillion of this 6 trillion fiscal budget will be raised through tax increases, and not entirely through printing money to achieve. What’s more, the 6 trillion is still in the pre-proposal stage, and will be repeatedly slimmed down before landing, and the landing time is even more distant. Obviously, the good is over-interpreted by the market.

In operation, I believe that the second bottom cannot be avoided, but the market does not have the basis for a short-term continuous plunge, so the plunge is still an opportunity to buy, at least in the next month, the pattern of market shocks will not change, investors can operate through repeated swing, accumulate less into more.

02 / city trader

Sentiment Analysis

BTC: The view remains unchanged, bitcoin continues to oscillate around a large range of 29000-43000 in the future, with 43000 being the ultimate target level for this round of rallies. The market is still in a state of flux.

ETH: The first wave of the rally was very strong, from the low of 1729 to the high of 2909, the maximum increase of more than 70% in the interval, completing the intermediate rally in advance. If the rally is not a reversal, the 2900-3000 area is likely to be the top area of the current round of oscillation, so above 2900 you can basically sell high. The current pullback is also the second opportunity to get on board, buy area for 2350-2400.

DOGE: the rebound has gas, Musk shouting single effect is also gradually weakened, the medium-term center of gravity continues to move down, it is recommended that the rebound out.

LTC: oscillation topping, bounce out.

XRP: The rebound of weak coins is as weak as the ball falling to the ground, one wave is weaker than the other, it is not recommended to grab the rebound.

EOS: better resilience, dare to rise and fall, continue to wide oscillation.

FIL: The form goes bad, it is recommended to get out.

DOT: far-reaching regulatory impact, medium and long-term negative trend remains unchanged, it is recommended to get out.

LINK: better resilience, the big drop can still second intervention, buy area 25-26.

UNI: Exchange regulation favorable UNI, medium-term shock upward pattern remains unchanged, can continue to hold.

Posted by:CoinYuppie,Reprinted with attribution to:
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