Market Analysis – BTC rebounds after breaking lows, short-term downside risk exists
Binance Follow Analysis
GTRadar – BULL
GTRadar – Balanced
Market potential opportunities
Meme and AI rebound strong
Restarting grid trading strategy
Rise of SocialFi applications
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Focus news
BTC recorded the largest monthly decline since 2023 in April. Looking back, the main reasons for the decline were the conflict in the Middle East and market concerns. The Federal Reserve not only did not cut interest rates, but there were also concerns about interest rate hikes. However, the conflict in the Middle East did not escalate, and the Federal Reserve announced last Friday that it will begin tapering its balance sheet in June. The interest rate decision remains unchanged, indicating no short-term interest rate hike intentions. The market temporarily dispelled concerns. The subsequent release of the non-farm payroll index was lower than expected, indicating that the actual employment situation in the United States is not optimistic.
However, after this news, the market began to anticipate the possibility of interest rate cuts in the future. Interest rate cuts usually benefit the rise of risk assets. Therefore, BTC also rebounded on that day, rising from around $56,500 to a high of $65,500, with a maximum increase of 15%. Altcoins also rebounded simultaneously, with the most prominent being AI and Meme sectors, both with increases of over 20%.
From a technical point of view, BTC broke through the downtrend line last week on 5/5 and temporarily rose above the EMA200. However, the subsequent trend began to weaken, and this week it fell below the EMA200 again, exhibiting a weak downward trend. Currently, the trend is still above the red downward trend line, but considering that the overall direction has turned bearish and the lack of a breakthrough above the $66,000 resistance level on 5/5, a high-high-low bearish trend has formed. Currently, the probability of further decline is higher, and there is a possibility of another decline in the short term, with short-term support at $66,000.
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“GTRadar – BULL” and “GTRadar – Balanced” had a return rate of 0.86% and -0.35% respectively in the past 7 days. In the past 30 days, the return rate was -13.68% for the former and -1.09% for the latter.
After several days of continuous decline in the cryptocurrency market, a larger rebound finally occurred in the past week. However, the overall trend is still in a weak oscillation phase, and the order placement strategy remains conservative. There are not many entry strategies.
Currently, “GTRadar – BULL” holds a net long position of about 30%, with a higher allocation in BNB.
Currently, “GTRadar – Balanced” holds a net long position of about 10% and holds multiple currencies, but the positions are not large.
Followers who frequently change their investment portfolios may not perform as well as followers who consistently follow a single portfolio. Do not easily end the follow-up due to short-term retracements. From the perspective of the curve chart, retracements are actually good timing for follow-up. Frequent entry and exit will greatly reduce the return rate.
The cryptocurrency market rose from the level of $56,500 this week to $65,500, and the overall market also followed the upward trend.
During this period, the sectors with the largest increases can be mainly divided into two categories: meme coins and AI concept coins. Among them, the most sought-after meme coins in the market are PEPE and WIF, both of which have increased by over 20% in the past 7 days. This seems to indicate that when the market rebounds, meme coins are still the preferred short-term momentum trading positions for speculative funds. This can be used as a reference for future investors when engaging in short-term bottom fishing trading.
In addition, AI concept coins such as RNDR, WLD, AGIX, FET, and TAO have also performed well this week. Coincidentally, there have been many recent news about the AI sector, including Microsoft’s increased deployment of AI technology and OpenAI’s development of a search engine, etc. In addition, Nvidia’s stock price has also risen from its low point of $812 to above $900 in the past week. It seems that as long as the AI sector continues to release news or new breakthroughs, the cryptocurrency AI concept coins can also benefit from the hype.
In addition to the above two sectors, coins such as AR, JUP, and ENA are also worth paying attention to.
The current market is basically in a consolidation phase, and the probability of a one-sided trend in the short term is not high. Multiple operations may result in more losses, and the annualized returns from exchange savings rates and funding rate arbitrage have also significantly declined. At this time, allocating funds to grid trading strategies may be a good choice.
Grid trading is an automated spread trading tool that allows users to set high and low price ranges to profit from market oscillations. Many exchanges currently have built-in functions for this. Investors can try allocating some funds to ensure that they will not suffer losses from long and short positions during oscillations, but instead benefit from them.
The recommended parameters for BTC grid trading are shown in the following pictures. Users can customize the parameters on the built-in robot page of Binance.
Due to the issuance of Friend tech’s tokens this week, the discussion about SocialFi has been increasing. This may be the first step in the flourishing development of the SocialFi concept race track. It can be seen that many people, such as Brother Maji, are acquiring FRIEND tokens and providing liquidity to form LPs. The main reason is that Friend tech allows LPs providing liquidity to achieve “triple mining” returns. The so-called “triple mining” returns come from:
1.5% liquidity pool fees
One-year liquidity mining additional rewards (a total of 12 million FRIEND tokens)
1.5% transaction fee of Club Key.
If investors are interested in betting on Friend tech, they can consider participating. It is said that the annualized return from triple mining is approximately 600%.
In addition to Friend tech, top applications such as Fantasy.top, the long-standing farcaster, and Pump.fun revolving around meme coins are also worth user participation.
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How to determine the current cycle of the cryptocurrency market, whether it is the beginning or the end of the bull market?
Characteristics of each cycle and what kind of trading tools to use to maximize profits
How sectors move during a bull market and the differences from previous ones
Analysis of future potential race tracks
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MicroStrategy, a U.S. publicly listed company that holds a large amount of Bitcoin, reportedly plans to launch a decentralized identity protocol based on the Bitcoin blockchain network. The goal of this protocol is to store and retrieve users’ personal information using the unspent transaction outputs (UTXOs) on the Bitcoin blockchain, according to a post by Bitcoin community KOL “Dylan LeClair” on Wednesday (1st).
The Grayscale Bitcoin ETF (IBIT), which has almost never had outflows of funds since its listing, recorded a net outflow of about $37 million on May 1st, according to information shared by Bloomberg analyst James Seyffart. This day also marked the highest total outflow of funds from the U.S. Bitcoin ETF to date, totaling $560 million.
Robert Mitchnick, the head of digital assets at BlackRock, said that although the heat of the Bitcoin spot ETF has cooled down, a new wave of activity from different types of investors may come after the current hiatus. In an interview, Mitchnick said that the next few months may see financial institutions such as sovereign wealth funds, pension funds, and charitable funds start trading Bitcoin spot ETFs.
Block, a company owned by Twitter founder Jack Dorsey, will start using a portion of its gross profit to periodically acquire Bitcoin. According to Block’s financial report released this month, it has started purchasing additional Bitcoin with 10% of its monthly Bitcoin-related gross profit since April and plans to increase holdings every month for the remainder of 2024. According to the first-quarter financial report, Block’s Bitcoin-related gross profit is $80 million. If this level of profit continues into the second half of this year, the company’s balance sheet will increase in value by $24 million in Bitcoin, according to this plan.
Arthur Hayes, the founder of BitMEX, shared in a recent post that for his personal short-term momentum trading positions, he chose to buy Solana and Doge meme coins. For long-term altcoin positions, he would consider buying more PENDLE and other undervalued altcoins. Hayes said, “I will increase the exposure of these investments for the remaining time in May. Next, my plan is to set these investments and stop frequent adjustments, waiting for the market to gradually realize the inflation potential of recent U.S. monetary policy statements.”
Grayscale’s Bitcoin Trust Fund (GBTC) recorded its first net inflow since January when it converted to a spot ETF, totaling $63 million and ending a continuous 78-day outflow trend, according to preliminary statistics from Farside Investors.
Visa, the payment giant, and blockchain data analytics company Allium Labs jointly developed a new indicator that shows that over 90% of stablecoin trading volume does not come from real users. This indicates that these types of cryptocurrencies still have a long way to go before becoming commonly used payment methods.
Rostin Behnam, chairman of the U.S. Commodity Futures Trading Commission (CFTC), said on Monday (6th) that when retail investors’ interest and the value of the cryptocurrency market rise, enforcement actions will also increase. He expects the next “enforcement action cycle” to occur within the next six months to two years.
According to South Korean media “HankYung,” quoting a Democratic Party official, once the 22nd National Assembly of South Korea takes office in June, the Democratic Party will request the Financial Services Commission (FSC) to reconsider the approval of Bitcoin spot ETFs in order to open up such financial products in the country. In addition, the Democratic Party is also considering options to amend existing financial regulations in case the Financial Services Commission is unwilling to approve Bitcoin funds.
FTX announced on Tuesday (7th) that it has submitted revised reorganization plans and disclosure reports to the court. According to the plan, 98% of creditors will receive at least 118% of the recognized debt in cash within 60 days after the plan takes effect, and other creditors will receive full repayment of the principal and compensation for the time value of their investments, amounting to billions of dollars.
The above content does not constitute any financial investment advice. All data comes from GT Radar official announcements, and each user may have slight differences due to different entry and exit prices. Past performance does not guarantee future results!
