The market has reached an important decision-making moment again. Is the second half of the bull market about to begin?

Source: Talking about Li and Talking about the Outside

In the article a few days ago, we mentioned that this month (May) will be a relatively important week, from two perspectives:

From a technical perspective (K-line), the overall trend of the weekly chart in recent weeks has been quite good. The MACD indicator has also shown a new crossover. If the market can continue to produce bullish candles in the next two weeks, we may really welcome a new round of upward trends next month (or the month after), and Bitcoin might have the opportunity to approach or break its historical high again. As shown in the figure below.

From a macroeconomic perspective, there are currently many uncertainties in the market, including the apparent slowdown in the growth of the U.S. economy for the year, but core inflation numbers have not shown a significant decline. The market (including Trump) has been applying pressure, but the Federal Reserve currently does not seem to have a clear intention to cut interest rates. The political situation in some countries/regions remains tense… and so on.

In simple terms, the current market seems quite interesting yet tangled.

The technical side says: I might start to rise!

The macro side says: I still want to do something, but I haven't figured out how!

Analysts say: It's either up or down, or sideways; avoid chasing highs while trying to prevent missing out.

Retail investors say: I'm still not feeling great, don't really want to talk, and I'm not very passionate.

However, we will still maintain the basic viewpoint from previous articles: unless there are new major black swan events, the crypto market may see a new round of phase bull market opportunities, but it will likely continue to belong to Bitcoin (New Bitcoin Era and Mini Altcoin Season), while altcoins are unlikely to see a comprehensive opportunity. Only a few altcoins under specific narratives may experience decent follow-up trends, unless there is a fundamental change in market liquidity (mainly focused on expectations regarding Fed rate cuts) or policies (such as the advancement or introduction of U.S. legislation related to cryptocurrencies).

1. Regarding the Fed's interest rate cut issue

Currently, the most concerning matter is likely the Federal Reserve's announcement of the May interest rate decision tomorrow morning (Beijing time, May 8). For Powell, it seems to be another tough choice. On one hand, the market and Trump are applying pressure for rate cuts, while on the other hand, the Fed seems to want to maintain interest rates unchanged.

From a neutral perspective, the Fed is indeed facing a rather difficult situation. Continuing to maintain interest rates or reopening the rate cut cycle does not seem to be the ideal choice. However, based on the current market expectations, the Fed is likely to remain on hold and postpone rate cuts.

However, some institutions are relatively optimistic, predicting that the Fed may cut rates three times this year, in July, September, and October, bringing the federal funds rate down to 3.5-3.75%.

Since the market has basically anticipated the outcome of tomorrow's Fed meeting (with a 95.6% probability that the Fed will likely maintain the current interest rate), this matter is probably already priced in by the market, and the specific announcement is unlikely to have a significant impact. We do not need to focus on the final interest rate result of this Fed meeting; perhaps Powell's speech will provide more guidance for the market's upcoming trends.

Although on the surface, Powell's speeches always indicate that inflation remains high and the Fed is not in a hurry to cut rates, some of the Fed's recent actions (such as slowing the pace of balance sheet reduction) suggest they may be attempting some changes.

Here we need to further explain that what often influences the price of assets in the market is expectations, not the specific numbers or results announced (which is what many people refer to as buying the expectation and selling the fact). In short, considering the current comprehensive situation, it seems that the Fed's stance has begun to become increasingly dovish, which may be seen as an early signal of liquidity returning.

2. The market has reached an important moment of choice

In the short term, there may still be some uncertainties in the market, but in the long term, these uncertainties also contain some opportunities.

After Bitcoin successfully broke through the resistance level of $86,000 last month (April), the price has been hovering in the range of $92,000 to $97,000 in recent weeks. Although it briefly broke through the resistance level of $95,000, it has also retreated several times since then. As of the writing of this article, Bitcoin's price is temporarily holding around $96,000.

Currently, the market seems to be waiting for Powell's speech tomorrow (Beijing time). Powell's remarks will determine the directional trend of the market in the coming weeks. If his speech is dovish, it is likely to lead to a new phase breakthrough, such as Bitcoin continuing to challenge the $99,000 level.

Of course, if Powell deviates from the script and takes a firm hawkish stance, the market may face new phase fluctuations, meaning it will continue to experience liquidity panic.

In the current market sentiment, if your investment risk preference is not that high, then in the short term, the safest method is still to maintain a sufficient proportion of cash liquidity. Avoid going all in or being fully invested; only when your position makes you comfortable can you better face potential market fluctuations.

In other words, opportunities and traps can sometimes appear simultaneously. Unless you are a very determined long-term holder of cryptocurrencies, it is best not to go all in during a bull market (currently). Preserving profits is more important than seeking more risky profits; otherwise, you may continue to miss out on greater opportunities in the next cycle.

I remember a few days ago, a partner in the group shared a saying, which roughly means: Many people's first bull market is for losing money, the second bull market is to break even (recovering losses from the first bull market), and the third bull market is for making money.

This saying may truly represent the real experiences of some people. For a long time, our advice has basically been to encourage everyone to think rationally and clarify their ultimate purpose for entering this field: Is it to invest in cryptocurrency as a business? Or to gamble using carefully crafted lies from oneself or others?

If the purpose is to invest, then it should return to the basics of investing, namely:

• You need to create a learning framework.

• You need to customize an investment system or strategy that suits your position.

• You need to strictly adhere to and execute your trading discipline.

• You need to minimize trading frequency (for example, if you trade N times a day, try trading once a week).

• You need to engage in other activities that interest you (such as taking notes, writing, organizing and creating charts, or even self-care).

In short, the crypto field is not difficult; perhaps the challenge lies in your inability to form your own logic and change your bad habits. It might be better to try to reduce unnecessary distractions (such as the impact of hundreds or thousands of messages/news daily, or following dozens or even hundreds of influencers to hear different opinions), and start following your own principles to find inner peace, reducing the impact of market fluctuations on personal emotional swings.

As long as you continue to persist in this game, you will not lack opportunities. Abandon the fantasy of getting rich overnight or quickly; do not attempt to win quickly. Just grasp the overall trend of the cycle, and do not fear failure. You can experiment with trading using small positions that you can accept losing.