Brothers, just now Binance news popped up a big story! Trump has fired shots again, this time focusing all fire on Federal Reserve Chairman Powell! He said the Federal Reserve headquarters building was a waste of money, even hinting that he might 'fire him'! This is not just ordinary rhetoric; it has directly shattered the market's confidence in the Federal Reserve's 'independence'!
The Federal Reserve's 'independence' is challenged, and the market is directly sweating: Government bond yields have soared!
What does it mean? Simply put, it's about whether everyone is worried that the Federal Reserve's future interest rate hikes or cuts will be influenced by political figures like Trump? It’s no longer just about economic data.
When the market panics, the 'yield' on US government bonds (which you can understand as the interest for lending money to the US government) rises rapidly! Why? Because uncertainty has increased, and investors require a higher return to lend money!
What impact does the rise in government bond yields have on the crypto space? The key 'seesaw' is here!
Traditional financial markets and the crypto space often resemble a 'seesaw.' When the yield on government bonds, a 'stable' asset, rises, it becomes more attractive, and some risk-averse capital may pull out of high-risk assets to grab bonds.
This might bring short-term selling pressure to Bitcoin and Ethereum, with prices likely under pressure. Imagine, if the interest on deposits at the neighboring bank suddenly skyrockets, wouldn't you also want to move some money over?
But! The crypto space has always been 'opportunities hidden in crises,' and this time there are two major turning points:
Turning point one: The expectation for interest rate cuts is still there, just more 'entangled'! Although Trump is applying pressure, the overall direction for the Federal Reserve to cut rates hasn't changed; only the timing and rhythm have become more ambiguous. As long as the 'sword of Damocles' of interest rate cuts hangs over, the long-term benefits for the crypto space, as a 'growth asset,' haven't disappeared! The market is currently betting on 'when to cut and by how much.'
Turning point two: A new choice for safe-haven funds? If political intervention really makes the traditional financial market 'unreliable' and highly volatile, it may instead highlight Bitcoin's 'anti-censorship' and 'decentralization' attributes. Will some funds seeking a 'safe haven' turn their attention back to the crypto world? Worth looking forward to!
Practical strategy for Chan theory: How to operate in this 'policy conflict' market?
Short term (1-2 weeks): Buckle up, volatility is the main course! Don't easily go All In or use high leverage. Focus on:
Key support levels for BTC/ETH: If government bond yields continue to surge, closely monitor whether BTC can hold this important threshold.
Be cautious with 'policy-sensitive' coins: Altcoins that heavily rely on the US market or regulatory trends may experience greater volatility; observe first.
Medium term (1-3 months): Focus on the core beneficiaries of the 'interest rate cut logic'!
BTC & ETH (Big Brother and Little Brother): The expectation of interest rate cuts is one of the core fuels for their long-term bullish trend; a deep correction is an opportunity for gradual positioning.
RWA (Real World Assets) Track: As government bond yields rise, the attractiveness of on-chain government bond tokens and other RWA products may increase; pay attention to leading projects' dynamics.
Decentralized stablecoins: If trust in the traditional financial system declines due to political intervention, the demand for decentralized stablecoins like DAI may be reinforced.
Don't forget the 'unexpected winners': If the market panics overall due to concerns about the independence of the Federal Reserve, the on-chain usage of stablecoins like $USDT and $USDC may surge, and related ecosystems may benefit.
Chan theory summary:
Trump's criticism of Powell is temporarily adding pressure to the market, causing government bond yields to soar, potentially siphoning off some hot money from the crypto space, leading to increased volatility. But don't panic, brothers!
The core logic hasn't changed: The interest rate cut cycle will eventually come! Political noise will only make the process more convoluted, not change the overall trend. The more 'entangled' the Federal Reserve is, the more it proves the 'vulnerability' of the traditional financial system, which may lead more people to realize Bitcoin's value in the long run!
What you need to do now:
Keep a close eye on government bond yields: If they continue to soar, be cautious in the short term; if they stabilize or even decline, an opportunity for a crypto comeback will arise!
Finding buying points through volatility: Keep an eye on the key support levels for BTC/ETH; don't be afraid if it drops significantly, it might be a golden opportunity.
Positioning 'core assets for interest rate cuts': Corrections provide opportunities, BTC, ETH, and quality RWA projects are the main lines.
Pay attention to the 'safe-haven alternative' logic: If the traditional market collapses severely, BTC's 'digital gold' attribute may shine again!
Want to understand policy trends in real-time and seize 'opportunities' in a 'crisis'? Click to follow now!
Tonight, we will have a discussion with fans to deeply dissect:
Where is the 'critical point' for soaring government bond yields? What is its destructive power for the crypto space?
How much is left of the probability of the Federal Reserve cutting interest rates in September behind Trump's 'rhetoric'?
Bottom-fishing list: 3 potential coins that were wrongly punished and are strongly related to 'interest rate cuts'!
Stay tuned! In the policy market, information is wealth, don’t fall behind!
'Fear of risk' cannot be found in a madman's dictionary—ambition is the only threshold: Join the Chan theory team!!
