Friends, the market has once again validated Old Chen's foresight with a bloody lesson! Do you remember my article from last week? When everyone was cheering for the rebound, only Old Chen sounded the alarm to you first: the Fed's dovish performance has concluded, the good news has been fully priced in, and any rebound is an excellent opportunity to take profits. No sooner had the words left my mouth than Friday's crash arrived as expected, with Bitcoin experiencing a plunge from its peak, briefly falling below the $90,000 mark. This is not an adjustment; this is clearly a complete collapse of the bullish camp after all the good news has been priced in!
Is now the time to buy the dip? Playing with fire!
Seeing that Bitcoin has once again retested around $3100, I know many friends are eager to ask: 'Old Chen, is it time to buy the dip?' I will tell you clearly: absolutely not! The risk release from this round of decline is far from over.
Macroeconomic headwinds loom large: the core logic of the market has changed. The Fed's dovish tone has become a thing of the past, and Chairman Powell has clearly shifted policy to a wait-and-see approach, with future actions entirely dependent on economic data. This means that the earlier fantasies of easing driven by policy expectations have been completely shattered. An even darker cloud—expectations of interest rate hikes from the Bank of Japan—is hanging over global liquidity. Once this last source of cheap money globally begins to tighten, all risk assets, including cryptocurrencies, will face significant challenges.
Technical rebound is weak: even last week's rebound was viewed by professional analysis agencies as hitting a wall at key technical resistance levels, with the medium-term trend still leaning downward. Market sentiment seems to have slightly recovered from extreme panic, but it is far from optimistic, with very low leverage participation indicating that large funds are still on the sidelines. This weak rebound is merely a dead cat bounce before the continuation of the trend.
Old Chen's core strategy: take advantage of the rebound to position shorts!
My core viewpoint has not wavered in the slightest: the overall direction moving forward remains bearish. However, we will not be reckless and blindly short.
Powell's 'data dependence' is our best navigation chart. A series of key economic data will be announced next week, each of which could trigger violent market fluctuations. This means that excellent swing trading opportunities are about to arise! The market will experience an 'expectation-realization-correction' cycle after each data release, and the volatility within that is precisely the opportunity we are hunting for in the short term.
Next week's battle plan: data-driven, swings are king.
So, my strategy is very clear:
Main direction: Maintain a bearish mindset, viewing any impulse rise caused by data as a good opportunity to add positions or layout short positions.
Core strategy: Keep a close eye on next week's economic data. Based on the temperature of the data (especially inflation and employment-related data), determine the subtle changes in market expectations for the Fed's future policy, thus capturing short-term trends. Volatility will be amplified, and this is the golden moment for swing traders.
Key defense line: For Bitcoin, closely monitor the strong resistance area near $93000. As long as the rebound cannot effectively break through here, the downward structure remains intact.
Summary: Stop fantasizing about a V-shaped reversal that leads to overnight wealth. The current market is in a painful transition of macro logic: the old reliance on easing has been broken, and new concerns about tightening are accumulating. Smart money has already shifted to defense. For us practical traders, this is the best of times—clear direction, and volatility as a gift.
Remember Old Chen's words: hold cash tightly, keep patient, and use the volatility brought by data to strike with precision like a hunter. Survive, and become the one who picks up treasures when the tide recedes; this is the ultimate rule of the market.
Follow Old Chen, next week I will organize the data focus and corresponding key levels in advance every day, guiding you through this data-driven swing trading battle!
