#8月核心CPI超预期 A brief look at next week’s market trend!

Liquidity was very poor this weekend, but for the bears, it provided greater confidence in a bearish outlook. Compared with the rebounds seen over the previous two weekends despite the bearish factors from Waller and the nonfarm payrolls report, this weekend was relatively weak, with extremely strong bearish sentiment.

After CPI, we will focus on two key points next week: the CLARITY Act and the Fed decision.

1. Current mainstream market expectations are largely leaning toward a delay, with a relatively low probability of the bill passing. Market confidence is insufficient. It needs 60 votes to be signed, but there are currently only 53, leaving a considerable gap. The result will be announced early Wednesday morning.

a If it is not passed and is delayed, the market may quickly give back the bullish sentiment from August, triggering selling and bearish sentiment, with the market reacting with a sharp decline!

b If it passes, then there is no need to say more—it would be explosively bullish. The market would rebound sharply!

2. The probability of a Fed rate hike has reached 90%, and a hike is essentially certain!

Currently, the probability of a 25-basis-point hike is approximately 89%, while the probability of keeping rates unchanged is approximately 11%!

The key driver is August’s hotter-than-expected CPI. Core CPI rose 0.3% month-on-month, above the expected 0.2%, indicating a rebound in inflation. The market immediately increased its rate-hike bets, from just 38% at the end of August to nearly 90%. Combined with PPI also exceeding expectations, multiple investment banks (Goldman Sachs, JPMorgan, and Deutsche Bank) have adjusted their views!
The market has already priced in a rate hike to a very high degree. The biggest risk is not the hike itself, but Powell’s speech afterward, which will be the key factor determining the market’s direction.

a If a 25-basis-point hike is delivered + Waller speaks hawkishly: the market will crash directly to 638!
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b If rates are raised but Waller is dovish (hinting that it is a one-time move): this would be a case of “selling the news,” and the market could easily rebound in a short squeeze!
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c Low-probability black swan: if rates are not raised, it would directly hit the bears, BTC would surge sharply, and large numbers of short positions would be liquidated.

Based on the market’s current reaction, the daily and weekly technical structures show a weak rebound, capital inflows are scarce, and momentum over the weekend was very poor. The bill and the decision both reflect strong bearish expectations. Combined with the lingering bearish impact of CPI, the market will most likely develop sell-the-expectation bearish sentiment tonight and next week. Watch 758 support first, then 718, with 638 as the ultimate level!$BTC