On the fifth day of the new year, we welcomed the God of Wealth, but the crypto space welcomed a crash!
Why is the market always risk-averse, often dropping, and why does a minor event kill BTC's price?
Because monetary tightening is still in effect, with money largely remaining in stable yield targets such as US Treasury bonds.
Monetary easing is needed for the money in this market to flow into high-risk, high-reward targets like stocks and cryptocurrencies. Even so, BTC will still return to over 100,000 due to ETF and the friendly relationship of the US president towards cryptocurrencies, especially BTC. This sentiment is 'fake.' The reality can be seen from ETH, so currently, even a slightly unfavorable event can lead to significant downward price fluctuations, making ETH and altcoins look even worse. This is why it is said that the current market is very difficult to navigate.
Therefore, the tariffs signed by the old man at 2.1 have led to another round of risk aversion. Low liquidity on weekends means that any negative news will cause high price volatility; this is normal. Tomorrow, on Monday, we will see the sentiment in the US stock market. It is not difficult to reverse this sentiment, but it is very harmful for altcoins to fluctuate back and forth.
When will the crypto market adjust properly?
Last Spring Festival, the crypto space was filled with joy, and optimism was high, with everyone looking forward to the future. But this year's New Year atmosphere is completely different; the celebration is gone, replaced by silence and caution. It is painful to see that 95% of altcoins are almost performing poorly. From a technical analysis perspective, Bitcoin's weekly and monthly trends have not shown any signs of peaking. Considering market cycles, investor sentiment, and various other key indicators, Bitcoin is still some distance from the top range.
Although the current market seems slightly sluggish, a turning point may be just around the corner. On one hand, the benefits of the national reserve for Bitcoin have yet to be realized. Once implemented, it is expected to inject a strong stimulus into the market.
On the other hand, the time for Ethereum's upgrade and staking ETF has not yet arrived, and the Sol ETF has also not been approved.
When the market generally believes that the altcoin season will not come, the turning point may quietly arrive.
According to the speculation of market interest rates and ZC trends, if there is a rate cut in June as expected, then the period from February to May is likely to welcome a rally.
Every good market cycle actually comes from the new high of Bitcoin. If Bitcoin does not reach a new high, this market will definitely not rise. Why isn't money going to altcoins in this round of market fluctuations?
The reason is very simple:
The size of Bitcoin is much larger than before; only the combined efforts of funds inside and outside the circle can push it to continuously reach new highs. As for whether the money inside Bitcoin will flow out to altcoins, I think it probably won't come out too much. When Bitcoin begins to slowly approach the equivalent of gold, everyone will take out their spare funds to buy that rare item. When national-level entry occurs, it will be difficult for individual market participants to influence the price.
A large-scale black swan will only bring opportunities to buy BTC, not to think about when to sell.
As for where Ethereum will head in the future, it depends on how much capital enters the market!
Investment itself is a matter of the butt determining the brain. If BlackRock buys 10 billion or 50 billion of ETH, then Ethereum is likely to become an unbeatable public chain. In the future, everything will run on this chain, and as for performance, it will be improved by Vitalik with five upgrades a year!
This is also why this round of the market is so difficult yet so simple!
Since December 18 of last year, altcoins have basically been stagnant. To take off, we need to see when the Federal Reserve will cut interest rates. From the current market expectations, there are three Federal Reserve meetings in the next four months, with relatively larger possibilities of interest rate cuts in May and June, so the next big market movement is likely to occur in April-May.
And since there are no interest rate meetings this month, the only points that can be speculated are a few altcoins' approval news. We can only wait for news to drive the market. In the March 20 meeting, the probability of maintaining the interest rate unchanged is 84%, and the chance of a rate cut is only 16%. It is uncertain whether there will be a reversal. In the May 8 meeting, the probability of a 25 basis point rate cut rose to 33.7%.
In the June 19 meeting, the probability of interest rate cuts has increased to 48.1%. If the expectations for interest rate cuts continue to rise in May and June, market sentiment will start to warm up, and altcoins may truly take off.
If we push upward, the time for altcoins to exert strength is only a quarter!
Brothers, come gather here quickly!
