CPI data broke a record high.
There is news that the probability of the Fed raising interest rates by 100 basis points has been raised to 81%, and the probability of 75 basis points has become 19%. Of course, it was a panic when it spread to the market.
Unexpectedly, after a small overnight decline, the market immediately rebounded. Many people ask, why is the CPI so high, inflation so high, and interest rate hikes so bad, why is it still rising?
I said this a long time ago. Although the interest rate hike is very important to the capital market, it is difficult to judge because it has a butterfly effect.
For example: if the interest rate hike is A, and the capital market rise/fall is F, then the entire impact process is A→B→C→D→E→F, even if the reasoning accuracy rate of each link is as high as 80% , then after 5 times of probability superposition, you finally rely on the interest rate hike to judge the final trend of the currency price, and the probability of the correct result is 30%. What’s more, do you have an 80% accuracy rate for each layer of inference?
A very simple matter of probability, Sherlock Holmes only exists in fiction, not reality.
However, the reason for this rebound is very simple, because the increase in interest rates affects the traditional capital involved in the currency market.
We pay attention to two issues. This time, BTC only rebounded slightly, standing firmly above the daily MA30. The ones that really rebounded sharply were ETH and DeFi blue chips, followed by layer1. At the same time, the projects with relatively large rebounds, such as AAVE and MATIC, are also community-based projects.
There will not be too many institutions in the secondary market of the entire cryptocurrency market, because they are only active in the primary market. In the secondary market, the first thing they are willing to open is BTC, and only VCs such as 3AC who are closely related to encryption will bet on Ethereum.
If you are in the currency circle according to the institutional and retail camps, it should be distributed like this:
Wall Street institutions camp: BTC, primary market
Retail camp: secondary market for various altcoins
Crypto VC camp: BTC, ETH, primary market
Wall Street capital has begun to slowly withdraw after 3AC and Celsuis, which are close to encrypted CeFi thunderstorms. Nansen counted the tracking data of seven VCs, five of which are selling, and those VC projects have fallen the worst this year.
VCs who were hesitant on the sidelines began to reduce their investment in Crypto due to interest rate hikes. Christie’s this year’s NFT auction volume was only 5% of last year’s, the market share of compliance platform Coinbase dropped to 3%, and blockchain VC venture capital declined for the first time in two years.
To put it bluntly, what is left in the entire market now is either a value investment type, or a person with a lot of money. In other words, the trend of the currency market has become controlled by crypto whales again. That’s why U.S. stocks fell and the currency circle rose; BTC didn’t rise much, and altcoins began to rise. …
How should I put it, although joining the Crypto industry is a long-term optimism for the industry, don’t take your own land too seriously. The total market value of the entire currency circle is now over one trillion yuan. How can such a capital volume be affected by the increase in interest rates?
It’s more of an emotional impact.
However, when everyone panics, they may not find one thing. From the bottom, AAVE has doubled, SNX has doubled, CRV has doubled, UNI has doubled, and many tokens have doubled.
But did anyone dare to increase their positions at that time? Actually none. There is a huge problem here, that is, many people always bring an adverbial adjective “stud” to the two things of increasing and reducing positions.
What kind of situation will this appear? It is that the bottom area becomes hesitant to increase the position, because in your impression, adding a position is a stud, and you are afraid that the market will continue to fall; and reducing the position in the high-level area also becomes hesitant, because reducing the position becomes a clearance, and you are worried that you will not be able to eat later. increase.
I am in “DeFi, is it okay? “, “Review in June: Give the currency circle and yourself a little more time”, “Three arrows will not die, the thief will not stop” The most important thing is not to wait for an empty position.
Like now, a lot of tokens doubled up when you didn’t even react, especially DeFi, which I specifically mentioned.
Maybe adding positions in batches looks like “not much profit”, but it is more resistant to risk. Investment itself can help people get rich overnight. What you need to do is to exchange lower risk for longer-term asset appreciation as much as possible.
If you want to get rich overnight with a very small principal, you can only be a gambling dog. This is a very realistic thing. But the question is, can you afford to lose the bet?
The market will slowly get better, hold on, coin holders.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/why-does-the-cpi-hit-a-record-high-and-the-market-rebounds/
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