Master Discusses Hot Topics:

Today, let's talk about the Federal Reserve. I wonder if anyone feels that the market's game with the Fed is like an old lady arguing—there's never a winner? This time is no different; the market eagerly waits to take advantage, only to be pressed down by the Fed again.

The Fed had no intention of cutting interest rates before the fourth quarter; the dot plot remains the same, likely indicating two rate cuts, with another two in 2026, clearly a hawkish stance. However, they have slightly eased on the balance sheet reduction, dropping from $25 billion a month to $5 billion.

Powell stated that this approach aims to prolong the balance sheet reduction process; at the previous pace, it would have been completed in six months. Now, it can drag on for 15 months, mainly to apply some pressure on the market, so that no one misunderstands that they are about to stop. Therefore, the balance sheet reduction hasn't stopped; it's just being done slowly.

However, the market reacted quite optimistically upon hearing this, as the significant tariff issue remains, making the likelihood of increased rate cuts low. If they were to cut more, we would have to worry about whether the American economy is cooling down.

But with the Fed's current attitude, it seems the U.S. economy is not yet in recession, which is a small blessing in disguise. With less balance sheet reduction, it means less liquidity being withdrawn from the market, so things can still be managed.

That said, the Fed hasn't eased up on monetary policy at all. Rate cuts? No way! Balance sheet reduction? Still going! When inflation rises, they just shift the blame to tariffs and continue to monitor the data. Overall, it feels a bit hawkish, and now we’ll see how the market battles against it.

The dot plot still indicates two rate cuts, but the hawkish sentiment is stronger. Votes for a single rate cut or no cut at all increased from 4 to 8; votes for two cuts dropped from 10 to 9; and votes for three or more cuts decreased from 4 to 2.

Last night, I saw many friends thinking that the balance sheet reduction would stop completely, but it only decreased from $25 billion to $5 billion. Therefore, in the short to medium term, U.S. stocks and Bitcoin should still be viewed through a bear market lens; the decline of wave C is just a matter of time.

Although U.S. stocks and Bitcoin are currently rising happily, nothing has changed from this meeting; the rebound still hasn't reached a reversal. The tariff issue continues to trouble the Fed.

Economic growth is sluggish, and Powell has also stated that there’s no rush to cut rates, so don’t expect a major turnaround. Even if Bitcoin rises, don’t get too excited; I’ve already said it’s a rebound, not a reversal. In the short term, if movements are slow, don’t rush to short; it’s better to wait and see.

Master Observes Trends:

Resistance Levels Reference:

First Resistance Level: 88200

Second Resistance Level: 86800

Support Levels Reference:

First Support Level: 85300

Second Support Level: 83700

Today's Suggestions:

After retesting at 87k, Bitcoin has now entered an adjustment range. The RSI is currently in the overbought zone, and a correction may occur. Therefore, it is advisable to first assess the strength of the adjustment and then look for short-term entry opportunities.

The high point formed after the rebound at 8 AM, 86.8k, is short-term resistance. If this resistance is broken during the day, the likelihood of the price testing 88k will increase.

If the first resistance is broken and an N-shaped upward movement forms, the bullish outlook can be maintained. Profits can be taken at the 200-day moving average, and then wait for a pullback before re-entering.

The current first support line serves as short-term support, and during the day, the range of 84.7k to 85.3k can be set as the support area. Attention can also be paid to the 120-day moving average for entry opportunities.

If the price breaks below the first support and the 120-day moving average, it will be necessary to reassess the downward trend, with 83.7k as the second support. The rebound perspective is still maintained, but the adjustment may be quite strong.

The current price is in the overbought zone, and a correction is expected. Instead of rushing to short, it’s better to observe the market sentiment, which has significantly recovered, and trade from a rebound perspective. Pay attention to the 120-day moving average trend on the 4-hour candlestick chart and use the RSI indicator to determine if a bullish trend is emerging.

3.20 Master’s Band Trading Setup:

Long Entry Reference: Light long positions in the 83700-84450 range. Target: 85300-86800

Short Entry Reference: Not applicable for now.

This article is exclusively planned and published by Master Chen (WeChat public account: Coin God Master Chen). For more real-time investment strategies, solutions, spot trading, short, medium, and long-term contract trading techniques, operational skills, and knowledge about candlesticks, you can join Master Chen for learning and communication. A free experience group for fans has been opened, along with community live broadcasts and other quality experience projects!

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