The current state of the financial market can be described as universally cold and hot. Whether it’s the “taking medicine” meme or the “golden pit,” participants in the stock market and the crypto world are witnessing the onset of a chaotic era that has already begun.

Related reading: “Global stock markets face the worst three-day performance in 50 years, can the crypto market hold up?”

The Federal Reserve is hesitant to cut interest rates, and the market speculates that it has lost its “support” ability, while Trump tears apart market confidence with tariff games, exacerbating external uncertainties. Meanwhile, the crypto market continues to decline under the dual pressure of technical and emotional factors, with multiple key support levels in jeopardy. This article explores multiple dimensions including macro, policy, market data, and technical analysis, summarizing traders’ observations on the current market for readers’ reference.

Macroeconomic Analysis

@AnnaEconomist

One reason I believe there is still downside potential in this round of sell-off is the lack of the possibility of a “Federal Reserve backstop” or a “Trump backstop.” The following content mainly explains why a “Federal Reserve backstop” has become difficult to occur:

1. The premise of this market downturn assumes that the Federal Reserve will cut interest rates five times this year. However, all FOMC members have indicated that more “certainty” is needed before considering another rate cut. Even by June, the Federal Reserve may not have enough “clarity” on inflation guidance. If companies continue to stockpile until June (which I believe they will), any widespread price increases may not become apparent until the second half of the year. The Federal Reserve must wait for clearer inflation signals.

2. The issue also lies in the Federal Reserve’s own expectations and judgments. If they still view the current situation as similar to that of 2022, worrying that inflation expectations might “de-anchor,” then even if the stock market drops another 20%, it won’t shake their stance (as was the case in 2022). From the Federal Reserve’s assessment of inflation risks in the March meeting, they indeed still regard the current situation as another 2022.

3. The Federal Reserve will also reference the inflation forecasts from major Wall Street investment banks. Several large banks have already predicted that the core PCE will rise to 4%-5%. These predictions will further dispel their willingness to cut interest rates.

4. The Federal Reserve places more emphasis on “hard data.” For example, news like the layoffs at DOGE may not reflect in non-farm data until the end of the third quarter or the fourth quarter. However, the upward trend in inflation data is easier and faster to manifest. In other words, the Federal Reserve itself is a lagging regulator.

5. Powell cares about his “historical positioning”, and he wants to be seen as a new generation of Volcker. At the same time, he is careful to maintain the independence of the Federal Reserve, so he is neutral in his rhetoric to avoid angering the White House. I say “try” because if you listen closely, he is deliberately downplaying the hawkish stance within the FOMC and the Fed’s staff.

6. During the recessions of the 1970s and 1980s, nominal long-term interest rates did not bottom out until the economy hit rock bottom. In other cycles, interest rates often bottomed out earlier. The current macro environment resembles that of the 70s and 80s, rather than other milder recessions.

@Cato_CryptoM

1. The final version of Trump’s reciprocal tariffs is number 9, so before number 9, it is more of a negotiation period. At this time, it is premature to overly define the overall extent of these tariffs and their impact on the economy, and it is even more premature to hastily define whether Trump will be impeached.

2. The core of Trump’s high tariffs is to have leverage and initiative at the negotiation table, so it is not necessarily about really raising tariffs by such a large amount to self-destruct or destroy his own approval rating.

3. Wounding the enemy a thousand while losing eight hundred does not harm Trump or MAGA, but rather the old money of America, specifically the dollar capital group. That is why they were anxious at the first moment and then promoted nationwide marches to coerce Trump’s compromise under the banner of national righteousness.

But who told you that Trump had to impose this tariff and had to raise it so high? If the purpose of the negotiations is achieved during this period, wouldn’t Trump suggest lowering the increase in tariffs? Isn’t that right?

If we look at it from a god’s-eye view, Trump’s seemingly absurd and even hasty proposal for reciprocal tariffs has led the whole world to think he is crazy or foolish. He uses this opportunity to complete negotiations at the bargaining table, internally stimulating opponents to act and rally public opinion to bind themselves, exposing all hidden enemies, and then announcing a reasonable reciprocal tariff policy on the 9th. Could this be a case of killing multiple birds with one stone?

Of course, this perspective still needs to wait for the results on the 9th.

4. Trump’s impact on the current market is basically in line with our expectations. During the previous election period, I wonder if our friends remember that we once mentioned there would be a “growing pains period” once Trump took office, and we are indeed experiencing such pains now.

But what exceeded our expectations was that no one anticipated the “pain” to be so strong, strong enough for us to think he was insane.

Of course, now we are scolding Trump only because we are victims of risky assets and the injured party in Trump’s “revolution”, but if we change our perspective, those who know history should know that the revolutions and innovations that have occurred in various countries in history need to go through a painful period, and the beginning of these revolutions and innovations is also not understood, and they are also coerced by the “national righteousness” brought about by the agitation and protests at that time.

What we see in historical results is only the memory of the success of the revolution, but not the pain they went through. I think what Trump is doing now is similar.

Many people believe that Trump is going to crash the economy, but if we look at it from another perspective, even if Trump’s actions have artificially created a recession, if the economy recovers quickly after the recession and shows enough vitality, then who still cares about the current pain?

History is always written by the victors, and since Trump has clearly not won yet, there is no need to rush to conclusions.

Of course, we originally thought that Trump was going to perform a “major surgery” on the United States, but it turned out to be more like “scraping bones to heal wounds,” so the pain is quite intense. Certainly, if we find out a year later that he has successfully extended the life of the United States by 50 years, we will probably all be shouting that Trump is “great.”

5. Regarding the pressure on inflation caused by tariffs, Powell has previously stated that we need to see whether the inflation transmitted by tariffs results in a one-time price increase in goods. If so, then inflation may not be that alarming, as the temporarily high prices will lead people to abandon consumption or seek alternatives.

Indeed, if this is the case, then inflation may have a weak short-term rebound, but it will lead to a weakening of demand, which in turn will slow down economic growth, most likely resulting in stagflation, and the next step after stagflation is economic recession.

For the Federal Reserve, the policy must have a lagging nature, as it cannot exceed the speed of economic operation; it needs to detect economic issues before adjusting strategies. However, while policy lags, our “Master Powell” can manage expectations in advance. If stagflation truly occurs, the market will anticipate a recession, and at that time, Master Powell can once again use his title as a master of expectation management to adjust market confidence, thus taking action at a critical moment to prevent the economy from actually entering a recession, while also highlighting the independence of the Federal Reserve.

Of course, tariffs lead to inflation, and the worst outcome is a month-by-month increase in inflation, which would directly cause long-term inflation expectations to rise, representing the most pessimistic scenario. I hope it won’t be like that at that time.

6. As for the drop in Trump’s approval ratings due to tariffs, this is an inevitable short-term reaction, and there is even a possibility of impeachment, but I think the probability is low.

Many of Trump’s current actions feel like a gamble to me, and once he wins the bet, support will naturally come, and the “defecting” Republican members will return. Impeachment may just be a short-term warning signal and may not necessarily lead to an actual impeachment process.

And if you lose the bet, it will naturally become a mess. Even if you’re impeached, who else can turn the tide? In the face of this mess, don’t expect the Democrats to take over and take the blame, right? I estimate that at this stage, even the Democrats would not want to take over, after all, a hot potato is hard to handle.

So, we can only see if Lady Luck stands by Trump in the end.

Negotiations are still ongoing among various parties, so before the 9th, we can only discuss from multiple angles. Who knows, while we are having a heated discussion here, they might have completed their negotiations over there, with tariffs unexpectedly lowered, and everyone living in harmony?

@Phyrex_Ni

BTC fell 5.5%, ETH fell over 10%.

There is no clear negative news, and the trading volume is not high, which is not like institutions dumping, but more like short-term risk aversion.

It may be a release of expectations regarding the countermeasures to tariffs from Europe and the United States on Monday. There is no sign of panic on-chain, and the structure has not been damaged; what is being sold more is the inventory within the exchange.

If U.S. stock futures continue to weaken tonight, the Asian session may relay panic, but as long as there is no recession, I think 70K is still a reasonable support.

In this round, I will continue to buy the dip, but with a small position and caution. I will make a decision on increasing my position after the tariffs are finalized and the GDP data is released.

When there is no reason for a decline, it is actually the most worth paying attention to.

Technical Analysis

@chetangurjar642

Latest trends update on the total market capitalization of cryptocurrencies:

It has currently broken below the dashed trend line on the weekly chart. If this break is confirmed, the next reasonable support level is at $1.91 trillion.

There is the intersection of the red bull market trend line and the long-term trend line (both are diagonal support).

Of course, it is also possible that it will further dip to the position of 1.61 trillion USD (it might just be a spike, but to be honest, I’m not sure). If it really reaches this position, the level of pain in the market will be unimaginable, so please make sure to prepare in advance… By the way, if this situation occurs, the possible bottom time point would be in April.

I have already started placing some buy orders for altcoins at a range well below the current price. Additionally, this K-line still has nearly 5 hours until it closes, so I’m still observing.

Let’s take it one step at a time.

@biupa

In fact, this weekend is no different from the previous few weekends, and it’s even similar to the weekend of February 3rd, with Saturday and Sunday seeing a gradual decline, followed by a significant drop on Sunday night, which continues until it stabilizes on Monday afternoon to evening.

@YSI_crypto

A slow rebound in a downtrend will only lead to more severe declines.

66-72k, who agrees? Who disagrees?

Recently, I have been holding a bearish idea, and the 72K-66K I said two days ago is about to arrive, and then I will look at the rebound and decide whether to enter a long order.

@market_beggar

Black Monday: BTC Bounces Back

ETH fell below 1600, and both the Taiwan stock market and the Japanese stock market triggered the circuit breaker mechanism. We once again witnessed history.

I know that such a decline is not easy for most people to handle. This article will focus on BTC and will directly organize the important positions that have been mentioned repeatedly from the perspective of on-chain data analysis for everyone’s reference.

First is the “STH-RP model adjusted for deviation”, currently:

Green line = 77,156

Blue line = 67,554

And 71 K ~ 79 K is still a relative vacuum area for URPD, so from the perspective of on-chain data, individuals are more inclined to wait for positions below 71 K.

Due to the downward trend on a large scale, I view any long positions as “counter-trend operations.” I’m not sure how many readers can understand what I mean, but this is the direction of least resistance in the market.

I know that most people prefer to try swing trading, but going against the trend is indeed one of the most common mistakes that retail investors make, and this is also a loss I experienced a few years ago as a novice. I hope everyone can take this as a warning.

Trading is the process of “cognition monetization”; when the market difficulty significantly increases, “not acting” is also a kind of action.

There is no need to chase every small-level fluctuation; the smaller the level, the more the price movement resembles Brownian motion. Focus on the big trend, stay in the strike zone, and leave the rest to patience and discipline.

The smoke of chaos in 2025 has already risen, and you and I are witnesses of history.