Written by: shushu, rhythm
Today’s financial market situation can be described as universally cold and hot. Whether it’s the “taking medication” meme or the “golden pit,” participants in the stock market and cryptocurrency sphere are witnessing the beginning of an already chaotic era.
Related reading: “Global stock markets face the worst three-day performance in 50 years, can the crypto market hold up?”
The Federal Reserve hesitates to cut interest rates, and the market speculates that it has lost its “support” ability, while Trump tears apart market confidence through tariff games, exacerbating external uncertainty. Meanwhile, the cryptocurrency market continues to decline under dual pressure from technical and emotional aspects, with several key support levels in jeopardy. This article explores various dimensions of macro, policy, market data, and technical analysis, summarizing traders’ observations of the current market for readers’ reference.
Macroeconomic Analysis
@AnnaEconomist
One reason I believe this round of selling still has downward potential is the lack of possibility for “Federal Reserve support” or “Trump support.” The following content mainly explains why “Federal Reserve support” has become difficult to achieve:
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The premise of this market decline is the assumption that the Federal Reserve will cut interest rates five times this year. However, all FOMC members have indicated that they need to see more “certainty” before considering another rate cut. Even by June, the Federal Reserve may not obtain sufficient “clarity” on inflation guidance. If businesses continue to stockpile until June (which I indeed believe is the case), even if broader price increases eventually occur, they will not become apparent until the second half of the year. The Federal Reserve must wait for clearer inflation signals.
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The problem also lies in the Federal Reserve’s own expectations and judgments. If they still view the current situation as similar to that of 2022, fearing that inflation expectations will “de-anchor,” then even if the stock market drops another 20%, it will not shake their stance (as was the case in 2022). Based on the Federal Reserve’s assessment of inflation risks during the March meeting, they indeed still consider the current situation as another 2022.
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The Federal Reserve will also refer to the inflation forecasts of major Wall Street investment banks. Currently, several large banks predict that the core PCE will rise to 4%-5%. These forecasts will further dispel their willingness to cut interest rates.
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The Federal Reserve pays more attention to “hard data.” For example, news like DOGE layoffs 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.
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Powell cares about his “historical positioning”; he hopes to be viewed as a new generation of Volcker. At the same time, he is carefully maintaining the independence of the Federal Reserve, so he keeps his rhetoric neutral to avoid angering the White House. I say “trying” because if you listen closely, you’ll find that he is actually deliberately downplaying the hawkish stance within the FOMC and the Federal Reserve’s staff system.
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During the recessions of the 1970s and 1980s, nominal long-term interest rates did not bottom out until the economy hit its lowest point. In other cycles, interest rates often reached their lowest point earlier. The current macroeconomic environment resembles that of the 70s and 80s, rather than other milder recessions.
@Cato_CryptoM
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The specific final version of Trump’s reciprocal tariffs is on the 9th, so before the 9th, it is more of a negotiation period. At this time, it is too early to excessively define the overall magnitude of these tariffs and their impact on the economy, and it is also too early to hastily define whether Trump will be impeached.
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The core of Trump’s high tariffs strategy is to have leverage and initiative at the negotiating table, so it is not necessarily about actually raising tariffs by such a large amount to cause self-destruction or ruin his support rate.
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Wounding the enemy a thousand while harming oneself eight hundred does not hurt Trump, nor MAGA, but rather the old money in America, which is the dollar capital group. This is why they were anxious at the first moment and then pushed for nationwide protests to force Trump into a compromise under the guise of national righteousness.
But who told you that Trump had to impose this tariff and that it had to be so high? If the negotiations during this period achieve their goals, wouldn’t Trump suggest lowering the increase in tariffs? Isn’t that so?
If we look from God’s perspective, Trump’s seemingly absurd and even hasty proposal for reciprocal tariffs made the whole world think he is crazy or foolish. He used this opportunity to complete negotiations at the negotiating table, internally stimulating opponents to rally public opinion to constrain himself, exposing all hidden enemies, and then announcing a reasonable reciprocal tariff policy on the 9th. Could this be a way to achieve multiple goals with one action?
Of course, this perspective still needs to wait for the results on the 9th.
- Trump’s impact on the current market is basically in line with our expectations. Previously, during the election period, I wonder if our friends still remember that we mentioned there would be a “period of adjustment” upon Trump’s inauguration, and indeed we are currently experiencing that adjustment.
However, what exceeded our expectations was that no one anticipated the “pain” to be so intense, to the point where we thought he was insane.
Of course, we criticize Trump now simply because we are the victims of risk assets, the injured party in Trump’s “revolution.” However, if we change our perspective, those who understand history should know that revolutions and reforms that have occurred in various countries throughout history all go through a period of pain. Moreover, the initial stages of these revolutions and reforms were also not understood by people and were subjected to the coercion of the “national righteousness” brought about by the protests and demonstrations at that time.
What we see in the historical results is only the remembrance of the success of the revolution, but not the pain they went through. I believe what Trump is doing now is similar.
Many people believe that Trump is going to crash the economy, but let’s look at it from a different angle. Even if Trump’s actions currently create a recession, if the economy quickly recovers after the recession and shows enough vitality, then who still cares about the pain of the moment?
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 performing a “major surgery” on America, but it turned out to be more like “scraping the bones to heal the wounds,” which is extremely painful. Of course, if a year later we find that he has successfully extended America’s life by 50 years, I guess at that time everyone will be shouting that Trump is “great.”
- Regarding the pressure that tariffs put on inflation, Powell has previously stated that we should see whether the inflation caused by tariffs results in a one-time increase in prices of goods. If it does, then inflation may not be as frightening, because temporarily high prices may lead people to reduce consumption or find alternatives.
Indeed, if this is the case, then inflation may have a weak rebound in the short term, but it will lead to a weakening of demand, resulting in a slowdown in economic growth, with the greatest likelihood of stagflation occurring, and the next step of stagflation is economic recession.
For the Federal Reserve, it is necessary for policies to have a lagging effect, as they cannot exceed the pace of economic operations and must wait to identify economic issues before adjusting strategies. However, the lag in policy can be countered by our “Master Powell’s” management of expectations, which can be proactive. If stagflation truly occurs, the market will anticipate a recession, and at this point, Master Powell can once again utilize his title as a master of expectation management to adjust market confidence, thus acting decisively at a critical moment to prevent a real recession and further demonstrate the independence of the Federal Reserve.
Of course, tariffs bring inflation, and the worst outcome would be a monthly increase in inflation, which would directly lead to a rise in long-term inflation expectations, representing the most pessimistic scenario. I hope it won’t be like that at that time.
- As for the decline 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 believe the probability is low.
Many of Trump’s current actions make me feel like a gamble, and once he wins the bet, his approval ratings will naturally return, and the “defecting” Republican members will come back. Impeachment may just be a short-term warning signal and may not necessarily lead to the impeachment process.
And losing the bet naturally leads to a mess; even if impeached, who can turn the tide? Don’t expect the Democratic Party to take over this mess, right? At this stage, I estimate that even the Democratic Party wouldn’t want to take over, after all, it’s a hot potato that’s hard to handle.
So, we can only see if Lady Luck is on Trump’s side in the end.
Negotiations are still ongoing among all parties, so before the 9th, we can only discuss from multiple angles. Perhaps while we are having a heated discussion here, the negotiations on the other side have concluded, and tariffs have been reduced more than expected, leading to a harmonious situation for everyone?
@Phyrex_Ni
BTC fell by 5.5%, ETH dropped over 10%.
There is no clear negative news, and the trading volume is not high. It doesn’t look like institutions are dumping, but rather resembles short-term risk aversion.
It may be a release of expectations regarding the countermeasures to tariffs on Monday in Europe and the United States. There is no significant panic seen on-chain, and the structure has not been broken; more selling is coming from the inventory within the exchange.
If US stock futures continue to weaken tonight, the Asian market may follow with panic, but as long as there is no economic recession, I believe 70K remains a reasonable support.
In this round, I will continue to bottom fish, but with a small position + caution, and will make additional investment decisions after the tariffs are implemented and the GDP data is released.
When there is no reason for the 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 fallen below the dashed trend line on the weekly chart. If this breakdown 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 to 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 be sure to prepare in advance… By the way, if this situation occurs, the possible bottom time point could be in April.
I have started to place some dip-buying 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 am still observing.
Let’s take it one step at a time.
@biupa
In fact, this weekend is no different from the previous weekends, and it is not even different from the weekend of February 3rd; both weekends experienced a minor decline on Saturday and Sunday, followed by a significant drop on Sunday night, which continued until the decline stopped on Monday afternoon to evening.
@YSI_crypto
A slow rebound in a downtrend will only lead to a more severe drop later.
66-72k, who agrees? Who disagrees?
Recently, I have maintained a bearish outlook. The 72K-66K range I mentioned two days ago is approaching, and I will assess the rebound situation at that time to decide whether to enter a long position.
@market_beggar
Black Monday: BTC Correction
ETH fell below 1600, and both the Taiwan and Japan stock markets triggered circuit breaker mechanisms. We witness history once again.
I know that such a decline is not easy for most people to accept. This article will focus on BTC, directly organizing the important positions that have been repeatedly mentioned 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 still represents a relative vacuum area for URPD, so from an on-chain data perspective, individuals are more inclined to wait for positions below 71 K.
Due to the downward trend at 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 counter-trend trading is indeed one of the most common mistakes made by retail investors, and it 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 “cognitive monetization”; when market difficulty significantly increases, “not acting” is also a form of action.
There is no need to chase every small swing; the smaller the level, the more the price movement resembles Brownian motion. Focus on the big trend, stick to the hitting zone, and let patience and discipline handle the rest.
The smoke of chaos in 2025 has already risen, and you and I are witnesses of history.
