The recent changes in the macroeconomic environment have played a key role in the rebound of the crypto market. Let's discuss some of the contributing factors.

1. Expectations of Loose Monetary Policy

As of March 16, 2025, the interest rate hike cycle of major global central banks seems to be nearing its end. The high interest rate environment in 2024 has suppressed the performance of risk assets, but as inflation becomes gradually controlled, the market generally expects that 2025 may enter a rate cut cycle, or at least maintain stable rates. This expectation has enhanced investors' confidence in liquidity.

Loose monetary policy typically reduces the appeal of holding cash, driving funds towards high-yield, high-risk assets such as cryptocurrencies. Recall that the quantitative easing policy in 2020 propelled Bitcoin from $10,000 to over $60,000. If the Federal Reserve signals a rate cut, a similar effect may be seen.

2. Inflation and Economic Stability

If the global supply chain recovers or energy prices stabilize (for instance, if the Russia-Ukraine conflict eases, leading to a drop in oil and gas prices), inflation may further decline. Weaker inflation will reduce investors' demand for traditional safe-haven assets (such as gold and government bonds), prompting a shift towards higher-yielding assets.

Bitcoin is often seen as 'digital gold.' When inflation expectations change, its safe-haven attributes may be amplified. At the same time, other cryptocurrencies (such as Ethereum and Solana) may attract more speculative funds due to their high volatility and growth potential.

Moreover, the influence of geopolitics cannot be ignored. For example, if the tension between China and the United States eases or the situation in the Middle East stabilizes, global risk appetite may increase, and the crypto market, as an emerging asset class, will benefit directly.

3. Specific Data Support

Assuming that the current (March 2025) Bitcoin price fluctuates in the range of $80,000 to $90,000, this may reflect the market waiting for clearer macro signals (such as the minutes from the March Federal Reserve meeting). If the U.S. dollar index breaks below a key support level (such as 100), it may trigger a new round of capital inflow.

Historically, from 2019 to 2020, the weakening of the U.S. dollar was highly correlated with the rise of Bitcoin, and the current environment is similar.

4. Future Impact and Outlook

Short-term: Macroeconomic data (such as the U.S. CPI or PPI in March) will become the market's focus. If the data is favorable (inflation lower than expected), it could push Bitcoin to break through $90,000 or even return to the $100,000 mark.

Medium-term: If a rate cut is implemented, combined with sustained institutional inflows (such as increased net inflows into Bitcoin ETFs), the market may enter a new bull market.

Risk Points: If the Federal Reserve unexpectedly maintains a hawkish stance, or if the global economy falls into recession, funds may withdraw from risk assets, hindering the rebound momentum of the crypto market.

What do you think about these factors' impact on the crypto market? Feel free to share your thoughts in the comments!