Causes of the Rebound: Major Players Buying and Policy Shifts

The recent market rebound can be attributed to the active buying by major participants and a shift in policy stance. Reports suggest that Trump may not impose tariffs on all countries, which means a full-blown trade war might be avoided. Previously, the market was in a state of extreme anxiety, fearing that Trump's tariff measures would push the U.S. economy into recession and lead to a significant drop in the U.S. stock market. However, it now appears that the situation is not as severe as initially expected, providing some relief to the market. Additionally, major participants have been consistently bottom-fishing. For instance, the most active buyer, MicroStrategy, has been making substantial purchases. As mentioned yesterday, MicroStrategy's stock price surged by 10% over the past two days! The basic logic is that if the market lacks confidence in this unique company that only buys Bitcoin, its stock price cannot possibly rise.

The Dual Nature of Trump's Policies and Market Impact

Where is the market headed in the future? Whether the market can continue to rise largely depends on the strength of Trump's policies. Trump's policies have a dual nature. Expansionary policies (which are favorable to the market) include tax cuts, deregulation, and interest rate cuts. Contractionary policies (which are unfavorable to the market) involve imposing tariffs and cutting spending. During Trump's previous term, the strategy was to expand first and then tighten. Initially, tax cuts were implemented to stimulate the market, followed by a trade war, which ultimately led to unrest and his ousting. However, in this term, the order has been reversed. Tightening measures were taken at the beginning, and whether there will be subsequent expansionary measures (tax cuts + deregulation) is still uncertain, although there is a possibility. The effects of the tightening measures have already become apparent. Initially, he pushed for efficiency reforms, cut spending, and threatened to impose tariffs across the board. Interestingly, it seems Trump himself has realized that these measures are too harsh. In early March, he stated that he would use a "scalpel" rather than a "sledgehammer," indicating a potential easing and a less aggressive approach. Therefore, Trump is also observing market reactions and public opinion, and subsequent policies may not be as stringent. If Trump adopts a more lenient stance, the market will likely follow suit, including a significant potential for the U.S. stock market to rise.

Technical Analysis of the Bitcoin Market

Currently, the Bitcoin market is showing a fluctuating upward technical trend. Starting from a low of 87020, it rebounded to a high of 88250, and has since been fluctuating narrowly around 88000. Ethereum reached a high of 2074 in the afternoon. The price fluctuation range over the past two days has remained relatively stable, with no significant changes in the overall structure. Notably, the price has consistently held above the downward 30-day moving average on the daily chart for the third to sixth days. This phase typically indicates potential upward momentum. However, due to the presence of a clear resistance structure above, the upward space may be limited. On the 4-hour chart, Bitcoin is making its third challenge to the key 250-day moving average with a pattern of higher lows, indicating that the current consolidation phase is nearing its end, and the probability of a subsequent breakout is gradually increasing. It is important to emphasize that in actual operations, it is necessary to patiently wait for the price to retest the key support level below or to see a pullback confirmation signal after a breakout. In the short-term trend on the 4-hour chart and below, the battle between bulls and bears shows a bullish advantage, with short-term price potential for upward movement, but caution is needed regarding the increasing selling pressure above. At the 1-hour level and below, the price is in a normal consolidation phase after an upward movement.

Short-term Trading Strategy Recommendations

In the short term, one can only follow market changes. Short when appropriate, go long when suitable, and retreat when necessary. Currently, we can adopt a strategy focused on buying on dips and selling on highs.

If you are feeling lost—unable to understand the technology, unsure how to read the market, not knowing when to enter, unable to set stop losses, not understanding take profits, randomly increasing positions, getting stuck while bottom-fishing, unable to hold onto profits, missing out on opportunities… these are common issues for retail investors. But don't worry, I can help you establish the right trading mindset. A single profitable trade speaks louder than a thousand words, and finding the right direction is better than repeated failures. Instead of frequent trading, it’s better to strike accurately, making each trade more valuable. If you need real-time guidance, you can scan the QR code at the bottom of the article to follow my public account. The market changes rapidly, and due to the timeliness of reviews, subsequent trends will be based on real-time layouts. I look forward to progressing steadily with you in the market.

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