May 21 BTC/ETH Market Morning Report -- The biggest crisis right now is whether the Fed will raise rates in July!

Market expectations for a rate hike surged from about 10% before the meeting to 38.5%. This shows that although there was no rate hike in June, the Federal Reserve released a hawkish signal, causing traders to significantly raise their expectations that it will act in July (see the chart below).

If expectations of a Federal Reserve rate hike keep heating up, how much more could the Middle East situation—already overhyped and played out—still affect the market? The top priority right now is to watch whether the Federal Reserve will raise rates in July, September, and October. If the market is broadly pricing in a Fed rate hike, then it’s time to set up short positions. It’s not a problem to trade a round of expectations before the announcement!

My thinking remains unchanged—staying with short positions from up high:

During the Dragon Boat Festival, the Bitcoin short positions around 63,900～64,500 are currently showing a small floating loss; for Ethereum, the short positions around 1,738～1,755 are still near the entry price—continue holding! Wait for the market to deliver the final decisive blow! That’s the moment when everyone is so afraid to jump in and buy the dip that they hit rock bottom in despair—then we use contrarian thinking to try to pick up at the bottom!

It’s not hard to tell from the broader market cycle, either: widening the time horizon, you can basically see that what we’re experiencing is only a technical rebound in a downtrend—just a correction in the middle of falling. The moving averages above show a clearly bearish alignment. At the current price near 64,300, price has broken above the middle band of the four Bollinger Bands; the upper band is around 64,900. There’s not much to say about the indicator sub-chart—lagging indicators don’t have much reference value; when it’s overbought it’s overbought, when there’s a golden cross there’s a golden cross. The key is still to pay attention to the specific resistance levels above:

Bitcoin: Watch for resistance and pressure around 64,800～65,500～66,400. Targets are to watch for support below: 63,600～62,200～59,666～58,000.

Ethereum: Watch for resistance and pressure around 1,760～1,780～1,820. Targets are to watch for support below: 1,680～1,640～1,580～1,510～1,444.

Note that there may be slight deviations in the above levels; Bitcoin ±100 points, Ethereum ±5 points. With price movements currently extremely dependent on fundamentals, it’s recommended to participate with small position sizes—participate with small position sizes! Keep some “bullets” in reserve and wait for future opportunities to buy the dip!
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