What is the reason for the recent sharp decline? How do we view the future market? 🔥
Brother Yao's exclusive analysis of the reasons for the decline is as follows:
(1) The interest rate cut in September has been implemented, and some funds believe that the "positive news has been exhausted," choosing to take profits and exit. Early investors in BlackRock's Bitcoin ETF have also recently taken profits, creating selling pressure.
(2) Trump dismissed Federal Reserve Governor Cook yesterday, an unprecedented action that the market views as a significant challenge to the Fed's independence, leading to a sharp decline in U.S. stocks, with BTC following suit. Trump's team may also rename the "Department of Defense" to the "Department of War" and other actions, increasing the risk-averse sentiment among some funds.
(3) The token WLIF issued by the Trump family has plummeted, impacting market sentiment. This is the third token launched by the Trump side, which has continued to crash after going live, dragging down overall market confidence and causing BTC to decline as well.
So, has the fundamental situation of BTC changed? No.
1: A Philippine congressman has proposed establishing a national Bitcoin strategic reserve, planning to buy 2,000 BTC annually for five years;
2: More countries and enterprises are still continuously increasing their Bitcoin reserves;
3: Market expectations suggest that China may open BTC trading within three years;
4: Legislation for stablecoins in the U.S. is progressing, strengthening the fundamentals of the overall industry.
There are also positive developments for SOL:
1: A new wallet extracted over 80,000 SOL (approximately $16.28 million) from Binance yesterday and has staked it;
2: U.S. company Sharps Technology plans to raise $400 million to establish the world's largest SOL treasury.
Why does ETH decline as well?
It is mainly a normal phenomenon of a correction after significant gains. In the past 24 hours, there has been a net outflow of 23,600 ETH from CEX, indicating that some funds are also taking profits.
On the macro front, 22 states in the U.S. have raised alarms about economic recession, with nearly one-third of GDP regions experiencing contraction, and expectations for interest rate cuts are still rising.
From a technical perspective, BTC is nearing the 120-day moving average, and the pullback is quite deep, with limited space for further decline.
The overall trend has not changed, but the market will still need about a week to digest the recent bad news.
Brothers with funds may consider gradually accumulating BTC at the current position.
