Today is the day for the CPI data release, and the market is fluctuating around the 83000 mark waiting for the data to come out. Bitcoin is currently at 83339, +0.51%; Ethereum at 2506, +0.56%; Gold at 4168, -0.43%. New York Federal Reserve President Williams is hawkish, stating that one more rate hike this year is appropriate, but the market bets on a 77.3% probability of no action in October, pushing rate hike expectations to December. BNY and Castle Securities completed the first tokenized U.S. Treasury three-party repurchase, marking a milestone in the RWA track, beneficial in the long term but drowned out by macro noise in the short term. Jiangye's judgment: the market fluctuates before the CPI data release; high sell low buy, do not chase orders; after the data release, determine the direction. For Bitcoin, short sell on rebound between 83700-84000, and look for light long positions on pullback to 82800-82500; for Ethereum, short sell on rebound between 2530-2550, and look for light long positions on pullback to 2480-2460; for Gold, look for long positions on pullback to 4150-4140, and short sell lightly on rebound between 4190-4200. This evening, the CPI is a critical point; trade lightly before the data appears, and set strict stop-losses.

Brothers, we walk the rivers and lakes without fear of distance, meeting like-minded individuals along the way. Hello everyone, I am Jiangye.

1. The bears restart, but don't chase shorts at low levels; today's rebound and fluctuation align with expectations

Yesterday I mentioned that after Harker's hawkish statement, the bearish trend restarted, but at the 1-hour mark there was a deep oversold condition, so do not chase shorts below 81500. Today Bitcoin rebounded from a low and fluctuated around the 83000 mark, with a high reaching 84134 but did not continue to dip, indicating that the logic of rebound repair after short-term overselling has been realized.

However, after rebounding to 83000, it got stuck, with bulls and bears stuck in a stalemate unable to break through. The reason is simple: today is the eve of the CPI day, and all funds are waiting for the data release while no one dares to take large positions in a direction. Thus, it is a fluctuating market during the day, where high sell low buy is the way; chasing orders simply means giving transaction fees to the exchanges.

2. Officials are hawkish vs market pricing; expectation gaps are at the core of today's fluctuations

Today's market is not without news; there is too much news but also hedging between bulls and bears, hence the fluctuations.

First, Williams is hawkish, but the market is not buying it. New York Federal Reserve President Williams clearly stated that one more interest rate hike this year is appropriate, citing Middle East tensions driving energy prices and AI investment transmitting inflation. However, CME FedWatch shows that the probability of no action in October is 77.3%, while the probability of a 25 basis point hike in December is 68.7%—the market has directly pushed rate hike expectations to the end of the year, not believing there will be a hike in October.

Jiangye interprets: this is a classic case of expectation gap speculation—officials may say “expected hawkish,” not “action hawkish,” verbally expressing intentions to hike, but the market feels October will not see action, pushing discussions to December. This time lag between “official words” and “market pricing” is the root cause of today's market fluctuations before the CPI release. Tonight's CPI will be the arbiter: if it exceeds expectations, the probability of rate hikes in October will soar and the market will go down; if it is below expectations, confirming no action in October, the market will rise.

Second, a milestone in RWA, but long-term benefits have no impact in the short term. BNY Mellon and Castle Securities completed their first tokenized U.S. Treasury three-party repurchase, marking the true beginning of traditional financial giants using blockchain for settlement, transitioning RWA from mere storytelling to practical use, which is fundamentally supportive of the crypto ecosystem in the long term. However, today the market's focus is all on CPI, and this long-term logic is directly drowned out by macro noise, having limited impact on market movement.

Third, tech stocks over-allocated to a six-year high, indicating a crowded risk asset environment. A Bank of America survey shows fund managers' over-allocation to tech stocks reaching the highest level since 2020, with semiconductors becoming the most crowded trade. More critically, if the 10-year U.S. Treasury yield rises to 6%, 37% of respondents would switch from stocks to bonds. Currently, U.S. Treasury is at 5.19%, still short of 6%, but the trend is upward, which is also why Federal Reserve officials dare to be hawkish—financial conditions, in their view, are still not tight enough.

To summarize: In the short term, hawkish expectations and market pricing diverge, long-term benefits are overshadowed by CPI, and crowded risk assets intertwine with bullish and bearish factors, making today a day of fluctuations, waiting for the CPI to determine the direction.

3. Fluctuations before CPI; high sell low buy, do not chase orders

Bitcoin 83339 | short sell on rebound 83700-84000, look for long on pullback to 82800-82500

The four-hour MACD red bar is shrinking, the one-hour green bar shows short-term weakness, but the larger structure remains above the middle band of the Bollinger Bands. Key resistance is 83700-84000, key support is 82800-82500. Focus on short selling when encountering resistance in the 83700-84000 range, and look for light long positions when stabilizing at support in the 82800-82500 range. Do not chase back and forth around 83000; during fluctuating markets, chasing orders is the easiest way to get hit from both directions. If tonight's CPI exceeds expectations, dropping below 82500 means looking at 82000-81800; if below expectations, breaking above 84000 means looking at 84500-84800.

Specific entry points, stop-loss locations, and target prices change in real-time; friends who want to follow can join to discuss.

Ethereum 2506 | short sell on rebound 2530-2550, look for long on pullback to 2480-2460

Multi-cycle MACD red bars are minimal, with uncertainty in bullish and bearish directions as funds flow slightly stronger than Bitcoin. Key resistance is 2530-2550, key support is 2480-2460. Focus on short selling when encountering resistance in the 2530-2550 range, and look for light long positions when stabilizing at support in the 2480-2460 range. Ethereum’s volatility is greater than Bitcoin’s, so maintain lighter positions and do not chase orders.

Specific entry points, stop-loss locations, and target prices change in real-time; friends who want to follow can join to discuss.

Gold 4168 | look for long on pullback to 4150-4140, short sell on rebound 4190-4200

The four-hour green bar is expanding, but KDJ is oversold, indicating a demand for a rebound. Williams' hawkish stance and high U.S. Treasury yields are bearish for gold, but Middle Eastern conflicts and inflation expectations support gold, resulting in a tug-of-war. Key resistance is 4190-4200, key support is 4150-4140. Look for long positions when stabilizing at support, and short sell lightly when rebounding into resistance. Gold primarily serves as a safe-haven asset; do not chase highs.

Specific entry points, stop-loss locations, and target prices change in real-time; friends who want to follow can join to discuss.

4. Today's small classroom: What is expectation gap speculation? Why didn't the market drop despite officials being hawkish?

Today, Williams said he wants to raise rates, and many people are puzzled: why didn't the market drop significantly and instead continued to fluctuate? Today we will clarify this expectation gap speculation.

The market trades in expectations, not facts. When officials say they will raise rates, that is news, but the market had already priced in the rate hike expectation in advance. If what officials say aligns closely with market expectations, the market will not experience major fluctuations.

Where is today's expectation gap? Officials say “one more rate hike this year,” which sounds very hawkish, but the market believes: ① no hike in October for sure, ② whether December will hike depends on the data. Therefore, the market pushed back the rate hike expectation; it is not that there won't be a hike, but that it will happen later. This time lag of “officials being hawkish verbally while the market prices in dovish” is the expectation gap.

How does the expectation gap affect the market? A small expectation gap results in market fluctuations; a large expectation gap leads to major market volatility. Tonight's CPI is meant to correct the expectation gap: if CPI exceeds expectations, the market realizes that rate hikes are closer than anticipated, leading to a drop; if CPI is below expectations, the market realizes that rate hikes are further away than expected, leading to a rise.

Remember: trading is not merely reacting to what officials say, but observing what the market has already priced in, then assessing whether the news exceeds or falls below expectations. The news itself is not important; the difference between the news and expectations is what matters.

5. Fan Q&A: Williams has stated rate hikes; why didn't the market crash?

One fan asked me: “Jiangye, Williams has clearly stated that there will be one more rate hike this year, so why hasn’t Bitcoin crashed and is instead fluctuating around 83000?”

My response: Because the market had already expected a rate hike, and what Williams said didn't exceed expectations by much.

First, the market had already priced in a rate hike by the end of the year. Previously, CME showed a probability of over 60% for a December rate hike, this expectation wasn’t created by Williams’ statements today. He merely confirmed this expectation, not throwing out any new, larger bearish news. Thus, the market did not crash, it merely fluctuated.

Second, the market believes there will be no hike in October. Williams stated “one more rate hike this year,” but did not specify October. The market bets on a 77% probability of no action in October, feeling that this meeting is merely a formality, with real action expected in December. Therefore, there isn’t significant downward pressure before October.

Third, there is inherently a demand for a rebound due to short-term overselling. After dropping 3300 points yesterday and being deeply oversold on the 1-hour mark, there is already energy for rebound repair. The bearish news from fundamentals and the technical rebound cancel each other out, resulting in fluctuations.

Thus, it is not that bearish news is ineffective, but that the bearish news has already been priced in, and furthermore, the technical aspects have provided a counterbalance. For a significant drop to occur, we must wait for CPI to exceed expectations, leading the market to see rate hikes happening sooner and in greater number than expected, and that will result in new downward pressure.

6. Risk Control Reminder

Today is the CPI data release day, and after the evening data comes out, there will be significant fluctuations. During the day, it is a fluctuating market, with high sell low buy, do not chase orders. Before the data is released, control all positions at a light level, do not heavily bet on direction, set strict stop-losses, and do not hold losses. Williams is hawkish, but there are divergences in market pricing; do not excessively short based on one official’s words, and do not overweight long positions just because of a rebound. Wait for the CPI dust to settle before deciding whether to add positions. Ethereum is in a stalemate with unclear direction and lighter positions. Gold has intertwining bullish and bearish factors; do not chase highs. If the CPI significantly exceeds expectations, reduce long positions promptly; if significantly below expectations, shorts must stop losses promptly. Before the data is released, be patient and do not make rash moves. Safeguarding principal is always the top priority.

7. Interactive Topic

With Williams being hawkish and stating “one more rate hike this year,” do you think there will be a rate hike in October? Do you expect the CPI data tonight to exceed or fall below expectations? Can Bitcoin hold above 82500? Share your views in the comments.

⚠️Risk Warning: The above content is purely for technical logical reasoning in trading, for reference and discussion only, and does not constitute any investment advice. Financial markets are highly volatile, and contract trading carries high risks; please trade rationally, strictly control positions, have your own stop-loss set, and bear your own profits and losses.

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Thank you for the trust and companionship of every family member; market situations change rapidly, and steady compounding is the long-term way. I am Jiangye, see you next time.

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