Market Viewpoint

The short line touches 84500 twice.

Last Friday, I posted these two charts in my TG channel. At that time, the pullback had not yet started, and I indicated the pullback points at 88 and 85, while the resistance levels were at 94,000 and 100,000.

On Friday night, it tested up to the 93100 range but did not reach the opening price of the annual line, then it fell this morning and is currently down to the 85 position.

It can be seen that our resistance and support are generally accurate, but the upper level did not reach 94, while the lower level fell below 85. This indicates that the resistance is strong while the support is weak, showing an overall weak pattern.

The decline this morning was mainly due to negative news from Japan's interest rate hike. I don't think China's crackdown on virtual currency will have much impact. In addition, Powell is set to speak again (without any advance notice of the content), which also contributes to some risk-averse sentiment.

Before the FOMC (there are about 9 days left), I believe the focus is on looking for a rebound, so I see this as a point to search for a second dip low. However, if 84500 is broken, then reclaiming below it would be a new possibility (i.e., breaking below 80,000 and then reclaiming).

Currently, I think there is a very low probability of directly dropping to 74000 or below before the FOMC. A rally into the FOMC after a second test is a more likely scenario.

After the FOMC, the next direction needs to rely on the content of the FOMC.

If the FOMC replicates last December's actions and reduces the expected number of rate cuts for 2026, it would be very detrimental to the further development of the bulls, possibly leading to a deeper drop before a "significant rebound." If the FOMC is favorable, it would begin a "significant rebound" earlier.

The trend of a "larger-scale rebound" (if any), replicating the period from January to April 2022 is shown in the figure.

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