After last week's intense shakeout and asymmetric rebound in Bitcoin (BTC) and Ethereum (ETH)
This week, the market will face a quadruple pressure from geopolitical factors, energy prices, critical Fed minutes, and the new and old policy cycles of Powell.
Yego has compiled the following significant news analysis and market trend analysis to keep an eye on this week:
1. Three major core macro factors this week
1. Geopolitical spillover and inflationary pressure with oil prices breaking $105.
Brent crude oil gapped up directly at the open on Monday, nearing the $105 mark.
The out-of-control oil prices mean that the previously high PPI and CPI data in the US are unlikely to cool down in the short term.
The liquidity of global risk assets will face a phase of 'dehydration'.
2. Wednesday's Fed minutes: Possibly officially establishing a 'hawkish bias'.
Beijing time this Thursday morning, the Fed will release the latest policy meeting minutes.
Due to the stickiness of inflation data in April and early May, these minutes will showcase a lot of officials' deep anxiety about a resurgence of inflation.
The market generally expects the Fed may completely abandon the 'dovish bias' in these minutes, signaling a long-term maintenance of high interest rates.
Some institutions even predict that if the Strait of Hormuz remains blocked, the probability of restarting rate hikes by 25 basis points by the end of the year will soar to 20%.
3. The first major test of the 'Waller era' and the soaring US Treasury yields.
On May 15, Waller officially took over the Fed.
As a recognized hardline hawk, his communication style is colder and relies heavily on absolute data.
The market is accelerating the test of this 'new king's' policy bottom line this week, with the 10-year US Treasury yield rebounding under risk-averse sentiment, and the dollar index continuing to strengthen.
This macro liquidity withdrawal effect is pushing the crypto market into a short-term 'liquidity desert'.
Under the siege of a strong dollar, high oil prices, and hawkish central bank minutes, the crypto market's short-term rebound is likely lacking sustained support from incremental capital.
Highly likely to show weak rebound; a prolonged consolidation will lead to a drop.
BTC (the big coin): As long as Wednesday's minutes do not release unexpected bullish news, BTC is likely to be pressured below 780 this week. If it breaks down, it may seek monthly lows to form a second bottom.
ETH (the second coin): Extremely weak performance, with no volume for the rebound. When BTC recovered last week, ETH showed clear signs of horizontal distribution around 2118.
This indicates that institutions and large funds are prioritizing dumping leading altcoins under risk-averse sentiment.
If ETH cannot stabilize above 2150 with reduced volume this Tuesday, it is highly probable that it will break below the previous low of 2085, accelerating down to the psychological level of 2000.
Core thought process: Abandon the fantasy of blindly buying the dip on the left side; before the Wednesday minutes come out, the strategy should focus on 'shorting at key resistance levels' or 'waiting to follow the trend after a breakdown', strictly controlling position leverage to guard against extreme spikes caused by geopolitical black swans.
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