Market analysis: The third emergency meeting + unlimited QE support, Bitcoin surges in response

Abstract: The Federal Reserve held its third emergency meeting this month and launched unlimited quantitative easing support. Bitcoin surged in response, as did U.S. dollar futures and gold, and the U.S. dollar fell.

At 10:30 today, the 8BTCCI market index reported 9217.44 points, with a 24-hour change of +10.34%, reflecting a sharp rise in the market; the total transaction volume was 1097.417 billion yuan, with a 24-hour change of +14.61%, and the market activity has increased. The Bitcoin Strength Index reported 100.61 points, with a 24-hour change of +2.17%, and Bitcoin's relative performance in the entire market has obviously become stronger; ChaiNext USDT OTC Premium Index reported 102.13, with a 24-hour change of -1.71%, and the USDT OTC premium level has obviously decreased.

Analysts’ Views:

In early March, the Federal Reserve made its first emergency rate cut of 50 basis points since 2008, and the U.S. stock market fell instead of rising, and then entered a mode of rapid rise and fall. On the 15th, the Federal Reserve suddenly made a second emergency rate cut of 100 basis points, the federal funds rate was reduced to zero, and the quantitative easing program was launched, but the market's reaction became more severe. Last night, the Federal Reserve held its third emergency meeting and announced the implementation of further rescue plans, including unlimited QE quantitative easing to support the bottom. This includes open-ended asset purchase measures, which will purchase $75 billion in Treasury bonds and $50 billion in agency mortgage-backed securities every day this week.

In the face of the risk of economic downturn, the Fed's response this month can be said to have fully learned from the experience of the 2008 subprime mortgage crisis, and has launched a series of major measures to resuscitate the market to prevent future troubles. However, the United States does not seem to have as much experience as my country in the epidemic, which may be related to the experience of SARS in China. Experience has made people more prepared for disasters, and decisive decisions have turned long-term pain into short-term pain. However, how to solve the long-term pain caused by the flood of money (debt dependence, income gap, bubble generation and other issues)?

The two parties have differences over the US$2 trillion fiscal stimulus, and the Treasury Secretary failed to attend. Under the influence of negative factors, the US stock market closed down from rising. However, US stock futures rose sharply today, and market sentiment showed signs of change under the expectation of unlimited stimulus. Under the unrestrained flooding, the US dollar was the first to bear the brunt, and gold became a safe haven. In a short period of time, the former fell significantly, while the latter surged 80 points. Bitcoin also rose sharply last night, with a short-term increase of nearly 10%. When the printing presses of various countries continue to destroy the credit of currencies, Bitcoin, a peer-to-peer currency system, with the original intention of "responding to the flooding", may play its due role in hedging.

1. Spot BTC market

At 8 o'clock last night, one and a half hours before the opening of the U.S. stock market, the Federal Reserve announced a new round of rescue plan (including unlimited QE). Bitcoin rose 8.24% in the next hour, accompanied by a significant increase in volume. Then the volume of the second one-hour K-line was close to the previous one, reaching a high of $6,600 before falling back. The daily MACD formed a golden cross, and the upward space is expected to open up, but the large amount of locked-in shares accumulated in the upper area is under strong pressure, and the vicinity of $7,000 is a key position in the near future.

2. Spot ETH Market

ETH also rose in tandem, but the growth was relatively weak, indicating that there was still a clear differentiation in funds in the market, waiting for BTC to test the upward pressure.

3. Spot BCH Market

BCH is moving upward, but the accompanying volume is not obvious. Waiting for BTC to rise again, if it can open up upward space in the future, it is expected to have a wave of market under the effect of the positive expectations of halving.

4. Spot LTC Market

This linkage with BTC went up, but it fell back after the sharp rise, further confirming that there are differences in funds in the market, and the short-term linkage is mainly with BTC.

5. Spot EOS Market

The volume and the increase are relatively small, there are large differences in the net inflow of funds in the market, and the short-term linkage is mainly with Bitcoin.

6. Spot ETC Market

In the short term, ETC's trend is slightly different, and there is no obvious increase in volume. There are a large number of pending orders above $5.2, and there is obvious pressure in the short term.

7. Analyst Strategy

1. Long-term (1-3 years)

Although the long-term trend of BTC is deteriorating, the price is not far from the bottom, which is a good time to hoard coins and make fixed investments. You can refer to the hoarding coin index. The leading smart contract platform ETH, the leading altcoin LTC, the leading DPoS EOS, the leading BTC fork coin BCH, and the leading ETH fork coin ETC can be configured at low prices.

2. Mid-term (January to March)

Affected by the overall financial environment, it is difficult for Bitcoin to bottom out in a short period of time. Those with light positions should intervene in batches.

3. Short-term (1-3 days)

There are differences in funds in the market. Depending on the pressure from above, you can buy low and sell high with a small position.