Binance's $BTC reserves have fallen below 570,000 BTC , the lowest since January 2024 - a similar drop in reserves preceded BTC's 90% surge in March.

Why has the cryptocurrency market plummeted in the past two days? An in-depth analysis of three key factors

In the past two days, the cryptocurrency market has plunged into a quagmire of continuous decline and violent fluctuations, prompting many to explore the reasons behind it. In fact, this drop is not due to a significant deterioration in the market fundamentals, but rather the result of the interplay of multiple factors. Let's delve into these three key factors.

Powell's 'Major Speech' Triggers Market Panic

Recent remarks by Federal Reserve Chairman Powell were like a bombshell, instantly igniting panic in the market. He stated that the Federal Reserve has no intention of participating in the government's hoarding of cryptocurrencies, which contradicts the market's previous expectations of regulatory easing. Investors' psychological expectations instantly collapsed, panic spread rapidly, and short sellers took the opportunity to increase their positions, resulting in a surge of sell-offs. Cryptocurrency prices plummeted sharply, and the market fell into chaos and turmoil.

Federal Reserve's Interest Rate Cut Expectations Disappointed, Market Enthusiasm Dwindles

The market has long anticipated that the Federal Reserve would cut interest rates next year, hoping to bring good news for risk assets like cryptocurrencies. After all, in a low-interest-rate environment, the cost of capital decreases, and investors tend to prefer investing in high-risk, high-return asset classes. However, Powell and the Federal Reserve signaled that the pace of interest rate cuts would slow down, which undoubtedly shattered investors' hopeful expectations. Market liquidity expectations tightened, investor enthusiasm quickly cooled, funds withdrew en masse, and the cryptocurrency market faced heavy selling pressure, leading to a continued decline in prices.

Year-End 'Capital Migration'

In summary, this round of declines in the cryptocurrency market is the result of multiple factors working together. Powell's remarks sounded the alarm for the market, the collapse of interest rate cut expectations undermined investor confidence, and year-end capital exits and lock-up behaviors tightened market liquidity, ultimately resulting in a significant price decline. However, it is important to clarify that this does not mean that cryptocurrencies will enter a prolonged bear market. Although the market may still experience fluctuations in the short term, this is merely a normal adjustment process. For investors, it is crucial not to blindly bottom fish or follow trends at this time; they should remain calm and steady, avoid high-leverage trading, plan their positions rationally, and patiently wait for the right entry opportunity to navigate through the changing tides of the market.

Today I saw a saying

The dumbest thing in the world is that some people can endure decades of unhappiness, yet are unwilling to spend a year changing themselves.

Similar words were probably said to you during the college entrance examination: if you work a little harder for these two years, the next few decades won't be that tough.

Trading is the same, as long as you put in a bit of effort, work hard for two years, perhaps you won't have to work hard for the next few decades.

Even if you only make a few million, you have to realize that if you work, even with a monthly salary of over 10,000, it would take decades to earn a few million. Trading is pure profit, while working deducts a lot of messy expenses. If you are not from a wealthy background or a privileged second-generation, there aren’t many paths to making big money. Starting a business or entrepreneurship, let's not even talk about the success rate, is also very low. Most importantly, the bigger your business grows, the less freedom you actually have; every day when you open your eyes, there are a bunch of employees waiting for you to be responsible for them.

For ordinary people, trading is already the easiest path available.

As an analyst who has been in the cryptocurrency space for many years, I am willing to share my experiences and insights with you. If you are interested in the cryptocurrency world but don’t know how to start, feel free to follow my profile, and let's explore the mysteries of the cryptocurrency space and its future possibilities together #加密市场盘整 $BTC