Introduction——
The essence of investment is to exchange time for value and to withstand volatility with patience. The market never fails to reward the vigilant steadfast; those who endure the bear market's patience and resist the urge to chase highs will eventually bear fruit in the time of compound interest. The so-called trend-following is never about following the crowd for profit, but about keeping true to one's original intention amid the noise and persevering through the lows. May every rational persistence bring forth the confidence and rewards to transcend cycles.
In the past 24 hours, the cryptocurrency market has shown a retreat and repair trend under the impact of conflicting macro data. The U.S. initial jobless claims unexpectedly "cooled down," with the number of first-time applicants plummeting by 27,000 to 191,000, the lowest level in three years, sharply contrasting with the employment weakness shown in Wednesday's ADP "small nonfarm" report. The data confirms that there are no signs of deterioration in the U.S. labor market, and the previously warming expectations for a Federal Reserve interest rate cut have not been further strengthened. The dollar index, which had been declining for several days, has stopped falling and rebounded, and the cryptocurrency market has also eased its upward momentum in a short time, with Bitcoin and Ethereum both experiencing a retracement and correction.
After Bitcoin's retreat near $90,900 in the early morning, it rebounded and is currently consolidating around $92,500, while Ethereum rebounded after dropping to a low of $3,070, currently rising to $3,170. Both currencies have seen a decline of around 1% in the last 24 hours, presenting an overall pattern of 'technical repair under macro disturbances.'
Macro data contradiction: Initial claims and ADP 'clash,' rate cut expectations face obstacles
The core reason for this market retreat is the significant divergence between initial jobless claims data and ADP data. The initial claims number of 191,000 far exceeded market expectations and is the lowest value in three years, directly overturning the 'employment cooling' judgment conveyed by the ADP data, indicating that the resilience of the U.S. labor market is beyond expectations.
This contradictory data caused the market's expectation probability for a 25bp rate cut in December to slightly drop from 89% to 82%. The marginal cooling of rate cut expectations has weakened the attractiveness of risk assets. As a result, the U.S. dollar index rebounded by 0.3% yesterday, returning to near the 100 mark, and funds temporarily flowed back from cryptocurrencies and other risk assets to dollar assets, directly triggering the retreat and repair of Bitcoin and Ethereum.
It is worth noting that the market's reaction to the contradictory data has been relatively rational, with no panic selling. The core reason is that the overall framework of short-term interest rate cut expectations has not been broken; it just lacks the momentum for further warming, and cryptocurrencies remain in a balance of 'macro support + technical pressure.'
Technical aspect: Pressure + overbought resonance, with limited correction range.
The retreat of both currencies is essentially a result of the combination of technical pressure and the retreat of macro favorable conditions, and the short-term correction space has been clearly limited:
Common pressure: Bitcoin and Ethereum have encountered strong resistance near the upper Bollinger Bands on the daily chart, and after multiple unsuccessful attempts to break through, they have naturally retreated; the KDJ indicator on the four-hour chart has remained in the overbought zone, and the need for technical correction has long been evident. This macro data shock has just become the trigger point for the correction.
Solid support: The short-term support structure has not been damaged, with Bitcoin still holding core defensive lines at $91,000 and $90,000, the former being the key starting point for recent rebounds, and the latter being a strong support at a round number; Ethereum, on the other hand, relies on $3,080 and $3,000 to form a tiered defense, with previous capital entry areas providing effective support.
Corrective control: Although the macro favorable conditions have temporarily paused, the core logic of the Federal Reserve's interest rate cuts has not changed, and the market still expects subsequent policy easing, so the correction range for both currencies is limited, with no signs of a breakdown in the downward direction, more like a healthy adjustment of 'gathering strength after a rise.'
Subsequent focus: Evening PCE data becomes a 'key variable.'
The market's attention has now focused on the PCE data released during U.S. trading hours - as a core inflation reference indicator for the Federal Reserve, the performance of the PCE data will directly dominate the direction of interest rate cut expectations:
If the PCE data is lower than expected, the inflation cooling signal will offset the impact of initial claims data, and rate cut expectations are likely to reheat, providing rebound momentum for Bitcoin and Ethereum, helping them break through resistance levels of $94,000 and $3,300;
If the PCE data exceeds expectations, inflation stickiness concerns will intensify, and rate cut expectations may further cool, with both currencies potentially facing deeper correction tests, requiring vigilance over the effectiveness of support at $90,000 and $3,000.
Overall, the current market is in a critical stage of 'data game + technical correction.' The macro contradictions have not been completely resolved, and the technical pressure still needs to be released. The evening PCE data will become the core driver to break the balance. It is recommended to focus on the support strength of Bitcoin at $90,000 and Ethereum at $3,000, as well as the momentum for breaking resistance levels, to flexibly respond to data-driven short-term fluctuations.
This article is exclusively contributed by Jane and represents personal views only. Due to the timing of the article's release, the above opinions or suggestions may not have real-time relevance and are for reference only; the risks are borne by the individual. Manage positions reasonably in trading, and avoid heavy or full positions. Develop good investment habits and wish everyone happy investing!
Written by JaneCrypto
