Let's start by reviewing Bitcoin's performance. After firmly establishing itself above $105,000, Bitcoin gradually climbed in the afternoon, soaring all the way to $110,650, just $1,500 shy of its previous high. This surge happened almost in the blink of an eye. Subsequently, the market reversed course, and it is now hovering above $109,000, having retraced $1,500 and still in a phase of consolidation.

So, what positive factors have driven this rebound?

Brother Jianguo, the U.S. Secretary of Commerce, and the U.S. Treasury Secretary all agreed that the Sino-U.S. talks were a highly productive meeting. Brother Jianguo mentioned that export restrictions might be lifted, and the talks have made good progress.

Meanwhile, the "verbal sparring" between Little Brother Ma and Brother Jianguo seems like a staged act. Brother Jianguo stated that the White House will not abandon the Tesla and Starlink projects, wished Little Brother Ma all the best, and even joked about whether Little Brother Ma was using drugs in the White House.

I speculate that Brother Jianguo might have sent Little Brother Ma a WeChat message or made a voice call: "Xiao Ma, let's stop this act. Now that Xiao Sen from California is opposing me, I need to deal with him first. We can continue to play along later."

As I said before, the current situation in the United States is fraught with numerous problems. They tried to use tariffs to solve issues but didn't gain any advantage. Therefore, it's hard to predict what will happen next.

The riots and protests are just the tip of the iceberg; many more problems are brewing beneath the surface, just like the situation with Ethereum. It's not that there are no issues; they just haven't erupted yet.

The current scale of the conflict is still relatively small. The National Guard uses tear gas and rubber bullets, while protesters respond with water bottles and rocks. Both sides are exchanging fire, but the situation is still under control. After all, "Brother Jianguo" directly dispatched 2,000 National Guards from California and is preparing to deploy the Marine Corps stationed in Los Angeles. However, the protest crowd only numbers in the hundreds and is acting in an organized manner.

If the situation doesn't escalate, this level of personnel deployment seems exaggerated, which further strains the relationship between Brother Jianguo and the California governor. But if the situation does escalate, these forces might not be enough.

This scene might be what Pelosi referred to as "the most beautiful urban landscape."

The essence of such events in the United States is essentially a struggle between political parties, which has now reached an irreconcilable point. It is said that even Chinese people in the United States have started to take sides over party issues. Even the traditionally "hands-off" Chinese, who prefer to keep a low profile and make money quietly, are now taking sides, which shows the immense influence of this issue. So, what we are seeing now might just be the prelude, and the real "main event" has yet to unfold.

The situation in the United States is complicated, let it continue to brew and erupt, and we will just watch the spectacle.

Let's move on to the market analysis:

This recent Bitcoin rally is not supported by many substantial positive messages; it is essentially a short squeeze situation. Market liquidity is becoming increasingly scarce, and there is a severe divergence between volume and price. It is evident that the market is in a controlled state, with bulls and bears washing each other back and forth.

Regarding the future support for further breakthroughs, such as interest rate cuts, both CITIC Securities and Citibank have suggested that the timing for rate cuts might be postponed until September. From these two pieces of information, it seems unlikely that there will be rate cuts before September, but it is not entirely certain, as these are just their predictions. Looking at it from another angle, it also means that the possibility of a rate cut in September is quite high.

So, everyone can make judgments based on the expectation that there will be no rate cuts before September, and there will definitely be a rate cut in September. Given the current time point, with three months still to go before September, it might be too early to speculate on rate cut expectations.

Therefore, we need to focus on the present and the market trends in the next one to two weeks, which may lay the foundation for the trends in the next two months. Due to the presence of many news factors, the market is more likely to fluctuate under the influence of news, meaning that news will dominate the market. Everyone should pay close attention to CPI and PPI data.

There is also the situation of the 10-year Treasury bond auction. If the market does not pay much attention to it at that time, the market may experience further fluctuations. The current situation in the United States is already hard to reverse.

From the current market situation, it is clear that only Bitcoin is "dancing alone," with Ethereum occasionally following suit. Bitcoin and Ethereum show a pattern of rapid rises and slow declines. The market often reaps profits where liquidity is strong. The performance of altcoins is even more direct; once they fall, they plummet sharply. Even if there are some strong, continuous rallies among individual coins, they generally end up the same way.

Although the prices of altcoins are already low, they may still go lower. If there is a counter-trend rally, the risk is greater than that of coins that do not rise. Coins that do not rise at least will not tempt you to buy high, while those that rally will attract you to enter and take the loss.

Currently, the main coin that the market makers are rallying is Bitcoin. But at this price level, how many retail investors dare to enter the market? Who is buying Bitcoin at $110,000? With such trading volume, apart from the wash trading of buying and selling by themselves, it has also shown a one-sided short squeeze V-shaped reversal trend. Everyone is watching the market makers' performance. Since no one is entering the market, it is nothing more than opening long positions, with both bulls and bears accumulating liquidity back and forth. Whichever side is stronger, the market will move in that direction.

The current market situation is a mindless rally, but market sentiment is not high; instead, there is a collective silence.

Bitcoin has not brought any investment pleasure to everyone, and it is not even as good as Ethereum.

BlackRock has been aggressively buying Ethereum recently. Currently, Ethereum is oscillating in the range of $2,400 to $2,800, which is also the most densely traded area. Once it breaks through effectively in either direction, algorithmic trading will go crazy with chasing rises and selling declines, and retail investors will also follow suit. At that time, either everyone will push the market up together, or there will be a crash and decline.

BlackRock's continuous increase in Ethereum positions, I guess, is to lower their holding costs, thereby driving a new round of upward market trends and altcoin market sentiment.

Once market sentiment is ignited, it is not impossible for Ethereum to surge above $3,500, and then they can break even.

So I have always been bullish on Ethereum, although its trend is indeed somewhat frustrating. The short positions on Bitcoin the day before yesterday and yesterday were not successful. Yesterday, at $107,660, I thought Bitcoin would fall. Although it did drop by a thousand points, it then rebounded and continued to rise. When Bitcoin stabilized above $108, I immediately went long on Ethereum and only made a profit of 100 points, but this also covered the losses from the two stop-loss orders on the short Bitcoin positions.

Future operation suggestions:

Bitcoin is unlikely to fall sharply at its current position. However, if there is a retracement and you continue to be bullish, you can continue to go long on Ethereum. In the next wave of the market, Ethereum may first break through $2,800 and head towards $3,000, provided that Bitcoin remains above $107 and does not fall.

Whether Bitcoin will break through its high again and reach $120,000 or $130,000, it has now reached a critical area, and no one can be certain whether it will directly break new highs. But regardless of whether it can reach the new high of $120,000, it is more appropriate to focus on Ethereum next.

Ethereum is like this: when Bitcoin rises, it follows suit, and when it falls, it doesn't fall much less, but shorting is not suitable because it may suddenly rally, so it is only suitable for going long. There is still a significant upward space from the current position to $3,000. If Bitcoin sets a new high, it will not be difficult for Ethereum to reach $3,000, which can be achieved with just two strong bullish candles.