At 2:30 AM, the watchers of the cryptocurrency market erupted! Federal Reserve Chairman Powell's remarks were like a boulder thrown into a calm lake, instantly stirring up waves. Is this late-night 'dove sound' a prelude to Bitcoin's carnival or a nightmare for altcoins?
Dovish statements ignite market enthusiasm
Powell's remarks changed from a previously tough stance to full of tenderness and moderation, directly addressing the core of the issues without any obfuscation. This dovish move has injected a strong dose of confidence into the market, and investors instantly sensed the 'bull market' aroma. In the capital market, dovish statements often imply loose monetary policy, which is undoubtedly a huge benefit for Bitcoin.
The connection between Bitcoin and U.S. stocks is becoming increasingly tight, seemingly becoming 'close partners' with the U.S. stock market. Powell's dovish remarks have made the U.S. stock market jubilant, and Bitcoin naturally benefits from this. Stimulated by favorable news, Bitcoin seems to have been equipped with rocket boosters; although it is oscillating around the high of $100,000, the bullish momentum clearly holds the upper hand, and market confidence is continuously recovering. Many investors firmly believe that it’s only a matter of time before Bitcoin breaks through the $100,000 mark, and they are heavily investing, trying to board this wealth express.
Altcoins are deeply trapped in a predicament of extremes.
However, while Bitcoin enjoys widespread popularity, altcoins find themselves in an awkward position of extreme disparity. On one hand, the overall positive market atmosphere allows altcoins to occasionally benefit and see brief uptrends; on the other hand, every fluctuation of Bitcoin at high levels hangs like the sword of Damocles over altcoins. Once Bitcoin experiences a pullback, altcoins will inevitably be dragged down, leading to a 'waterfall' crash.
Taking Ethereum as an example, it is still struggling around $1820. Although there are occasional rebounds, it cannot shake off the 'shadow' of Bitcoin. Every fluctuation of Bitcoin causes the price of Ethereum to follow suit, leaving Ethereum holders anxious. The situation for other altcoins is even more challenging; they have become accustomed to a downward trend, and just when there’s a slight rise, they quickly return to their previous state, as if trapped in an endless vicious cycle.
Investment strategy, where to go from here?
In such a market environment, 'buy Bitcoin and short altcoins' seems to have become the consensus among investors.
Bitcoin, with its strong market influence and close ties to U.S. stocks, possesses stronger resilience and potential for growth under favorable news; whereas altcoins, lacking fundamental support, are more susceptible to impacts during market fluctuations.
However, for altcoins to truly break free from their predicament, perhaps a 'ground pin' is needed to break the deadlock. Only when altcoins experience a deep bottoming out and completely release market panic can they attract bottom-fishing funds, thus ending the long-term downward trend. Before this happens, every investment in altcoins for investors feels like groping in the dark, full of uncertainty.
The cryptocurrency market is highly unpredictable; while Powell's dovish remarks have brought short-term market benefits, the future trends are still full of variables. In this market full of opportunities and risks, investors must maintain a clear mind and make cautious investment decisions. After all, in the cryptocurrency space, surviving brings hope, and preserving capital is key to laughing until the end.
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