Bitcoin will continue to hit new highs this year, why do I say that?
In recent weeks, the White House and the Federal Reserve have turned a blind eye to the sharp decline in U.S. stocks, and neither side seems willing to back down in this game of 'chicken.' Although the expectation of a recession is likely just a negotiating tactic by Trump to exert extreme pressure, the uncertainty of policy games has further fueled the market's risk-averse sentiment. However, as of now, the continued decline in U.S. stocks seems more like a proactive act of compressing valuation bubbles by the higher-ups, rather than a precursor to a crisis spiral. A typical example is that during the U.S. stock market's issuance of $5 trillion, A-shares, Hong Kong stocks, European stocks, and gold have all risen significantly, which is different from the scenario of a global market collapse during past dollar liquidity crises (the circulation of the dollar is the heart of global liquidity).
Although the crypto market has faced liquidity backlash amid the valuation contraction in U.S. stocks, Bitcoin's structural resilience remains strong, mainly reflected in three aspects:
1. According to Bloomberg terminal data, since the global liquidity crisis in March 2020, in the extreme scenario where the NASDAQ has seen a monthly drop (calculated over 30 days) of more than 15% on seven occasions, the adjustment of Bitcoin this time has significantly converged (-21%). Compared to the historical extremes of -53.6% in March 2020 and -37.2% in June 2022, this time's volatility has compressed by 65.8% and 50.8%, respectively.
2. Unlike the extremely pessimistic expectations generated during previous rounds of major declines, during this drop, the funding rate of Bitcoin perpetual contracts and the premium rate of Bitcoin quarterly contracts have remained stable, indicating that the will of the bullish main force has not wavered during the decline.
3. This adjustment not only has a relatively smooth trend but also has hardly experienced extreme spikes in intraday trading, indicating that the decline mainly stems from panic selling by small and medium investors, while large whale investors are still holding their positions firmly.
The fundamental reason is that fiscal tightening has a more apparent suppressive effect on inflation. Therefore, I agree with the views of Trump and Bessenet: interest rates will soon decline, and only rate cuts can drive the market again. $BTC
Finally, if you haven't joined our Binance chat room, please check out my pinned article.
In recent weeks, the White House and the Federal Reserve have turned a blind eye to the sharp decline in U.S. stocks, and neither side seems willing to back down in this game of 'chicken.' Although the expectation of a recession is likely just a negotiating tactic by Trump to exert extreme pressure, the uncertainty of policy games has further fueled the market's risk-averse sentiment. However, as of now, the continued decline in U.S. stocks seems more like a proactive act of compressing valuation bubbles by the higher-ups, rather than a precursor to a crisis spiral. A typical example is that during the U.S. stock market's issuance of $5 trillion, A-shares, Hong Kong stocks, European stocks, and gold have all risen significantly, which is different from the scenario of a global market collapse during past dollar liquidity crises (the circulation of the dollar is the heart of global liquidity).
Although the crypto market has faced liquidity backlash amid the valuation contraction in U.S. stocks, Bitcoin's structural resilience remains strong, mainly reflected in three aspects:
1. According to Bloomberg terminal data, since the global liquidity crisis in March 2020, in the extreme scenario where the NASDAQ has seen a monthly drop (calculated over 30 days) of more than 15% on seven occasions, the adjustment of Bitcoin this time has significantly converged (-21%). Compared to the historical extremes of -53.6% in March 2020 and -37.2% in June 2022, this time's volatility has compressed by 65.8% and 50.8%, respectively.
2. Unlike the extremely pessimistic expectations generated during previous rounds of major declines, during this drop, the funding rate of Bitcoin perpetual contracts and the premium rate of Bitcoin quarterly contracts have remained stable, indicating that the will of the bullish main force has not wavered during the decline.
3. This adjustment not only has a relatively smooth trend but also has hardly experienced extreme spikes in intraday trading, indicating that the decline mainly stems from panic selling by small and medium investors, while large whale investors are still holding their positions firmly.
The fundamental reason is that fiscal tightening has a more apparent suppressive effect on inflation. Therefore, I agree with the views of Trump and Bessenet: interest rates will soon decline, and only rate cuts can drive the market again. $BTC
Finally, if you haven't joined our Binance chat room, please check out my pinned article.