Source: Hua Li Hua Wai
Yesterday (March 10, Eastern Time), after the market opened, U.S. stocks continued to suffer heavy losses, with the Nasdaq down 4% and the S&P down 2.7%... As shown in the figure below. Giants like Tesla, Nvidia, and Apple all saw varying degrees of declines, with Tesla facing the worst, dropping over 15%. Since reaching a historical high of $479.86 on December 17, 2024, Tesla's stock price has halved, and its market value has evaporated by over $800 billion. Moreover, the X platform was also attacked yesterday, experiencing crashes and outages; it seems that Elon Musk has not been having a good time lately.
Of course, the crypto market isn't doing much better; influenced by overall market sentiment and environment, today (March 11, Beijing time), BTC fell to around $77,000, and ETH directly dropped below the $2,000 mark, reaching a low of around $1,800. As of the writing of this article, BTC's price is $79,000, and ETH remains around $1,800. As shown in the figure below.
In just the past 24 hours, over 330,000 people across the network have been liquidated, with a total liquidation amount of $940 million, including $742 million for long positions and $198 million for short positions. As shown in the figure below.
From an intuitive perspective, it seems that more and more people have lost confidence and patience in the market. We are currently at a new level of extreme fear since the relative lows of the last bear market, and the atmosphere of the bear market further shrouds everyone...
1. Is Trump deliberately creating a recession?
Recently, there has been a viewpoint circulating online that says: Trump is deliberately creating a recession. I wonder how many people think so?
In fact, we have mentioned Trump multiple times in recent articles. As a successful businessman, Trump seems to be operating the United States like his own company.
So, how can one quickly become a great American president? The simplest way seems to be to 'print money' and make the dollar great again.
And the simplest path to achieving this seems to be to play with 'debt'; under this premise, what can be done is evident, such as using tariffs, layoffs (the efficiency department Musk is leading is currently doing this), and other measures to intensify economic difficulties and recession contradictions, forcing the Federal Reserve to take direct action.
The recent market has reminded some people of the circuit breaker incident five years ago. After the circuit breaker event in 2020, the Federal Reserve implemented unlimited QE, and the US government passed a massive stimulus package. Subsequently, as liquidity concerns eased, the market began to rebound sharply.
Here we make a relatively intuitive assumption (note that this is only an assumption): If the U.S. stock market continues to plummet and extreme situations reoccur, similar to the circuit breaker events during the 2020 pandemic, will history repeat itself?
We currently see no answers to this question, and it's hard to guess. For Americans, there are both opportunities and costs involved.
Of course, these comments are merely a form of wishful thinking; short-term market trends cannot be accurately predicted. However, one point is worth contemplating: Trump could become a catalyst for a new and larger bear market, and conversely, he could also become a catalyst for a new and larger bull market; this issue is subjective.
2. Should we buy the dip or cut losses?
I noticed that today the partners in the group have started to lively discuss the market again. Compared to the calmness of a few days ago, today's decline has actually improved the discussion atmosphere in the group.
However, opinions vary; some partners have already recognized the bear market, some are still holding USDT and waiting, while others continue to buy in batches...
I remember that every time the market plummeted, I would receive many messages in the backend, asking whether to cut losses/change positions or whether to buy the dip. However, a very interesting phenomenon recently is that regardless of how the market declines, I see fewer and fewer messages in the backend; people seem to have lost interest in actively asking such questions. I wonder if they have left after losses? Or have they become numb to the drops? Or have they successfully escaped the peak?
At the same time, another interesting phenomenon is that compared to previous articles, the average reading volume of current articles has not decreased, and there are even some new partners (new followers) leaving comments asking me how to use a ladder, how to use exchanges, how to buy spot, and other basic questions.
Based on these relatively 'one-sided' personal impressions, the pessimism or exit of some old hands may be more the result of continuous position losses, while the entry experiences of some new hands may be more influenced by recent mainstream media coverage, such as the White House holding a crypto summit and the U.S. strategic reserve of Bitcoin (it should be noted that currently the strategic reserve is still at the level of executive orders; this strategically significant matter is only just beginning, and we still believe it needs long-term attention. Additionally, it is important to know that after Biden took office, he overturned at least 62 executive orders from Trump's administration, so will the next president continue to promote the strategic reserve issue?)... etc. Unlike before when news only reported that Bitcoin was a tulip scam, now these news items can be openly discussed.
But no matter what, the problem everyone is facing now is the continuous market decline. As for whether to buy the dip or cut losses, there is no clear answer or template; it still depends on your own position and risk tolerance.
Short-term market predictions are unreliable; I will always maintain a long-term optimistic outlook, and this relatively optimistic long-term view has been mentioned several times in previous articles. Regarding the current overall market situation, our advice can be summarized as follows:
- For long-term trading
As long as it is an asset you believe in for the long term (like BTC or Tesla), then just be patient with large-scale period operations according to your risk tolerance.
In simple terms, when you decide to make long-term plans on a matter or an asset, you need to not only see or value its long-term potential but also be prepared to bear any possible risks (even in extreme cases, the risk of going to zero or bankruptcy) both now and in the future. As long as you can achieve these two points, you can hold on for the long term.
Just like now you see Bitcoin starting with a 7, if you still believe Bitcoin will eventually rise to $200,000, then you can definitely continue to increase your position in batches (note: in batches, not all in) and do what others dare not do, rather than doing what everyone else is inclined to do.
In fact, without leverage, if you allocate 10% of your total personal assets into N parts for continuous purchasing (dollar-cost averaging) of Bitcoin, this long-term investment will likely become one of your most successful investments in the future. As we described in an earlier article: the best time to start was ten years ago; the second best time is now.
- For short-term trading
It is strictly based on individual positions and risk preferences for profit-taking/stop-loss operations.
For example, regarding profit-taking, you can customize it by combining technical analysis from K-lines, macroeconomic indicators, and market sentiment indicators along with corresponding project research results. However, the goals should be as reasonable as possible, especially after the market enters a bull market; you must also achieve phased profit-taking, avoid falling into greed and forgetting your trading discipline. As for stop-losses, different people have different psychological tolerances, so there are no fixed standards or templates for this. I've previously shared my basic operations, which is that as long as the altcoins I hold drop by 20%, I will directly stop-loss and clear my position.
Of course, to avoid unnecessary debates, the terms 'long-term' and 'short-term' may have different definitions for different people; this can only be continuously optimized based on individual positions and strategies. But for most ordinary people, my personal advice is that you can define the short term as 1-3 months or 3-6 months, which might be more reasonable, and avoid trading too frequently (for example, trading several times in one day), unless you consider yourself a professional trader who can perceive the market in real time.
So, should we buy the dip or cut losses? You can reconsider based on your own position and risk tolerance. Tomorrow is '312', and I wonder how many people remember March 12, 2020, as shown in the figure below (from the night of March 12, 2020, to the morning of the 13th).
3. At the end of the article, let's take a look at what other noteworthy or interesting things have happened in the past few days:
- MicroStrategy's $21 billion preferred stock plan
Regarding MicroStrategy, we have previously published several articles on related topics. For example, in last month's article (February 28), we discussed some comparative data, as shown in the figure below.
Just yesterday (March 10, Beijing time), there were reports that MicroStrategy has submitted a prospectus to issue up to $21 billion worth of 8.00% preferred stock (Series A perpetual preferred stock), and the funds raised may continue to be used to purchase more BTC.
This is definitely a positive for BTC (but such positives seem unable to directly reverse the short-term trend currently), yet the selling pressure from the new issuance of $21 billion has still caused a significant drop in MicroStrategy's stock (along with other comprehensive factors such as market sentiment contributing to the decline).
MicroStrategy has incurred over $3 billion in unrealized losses on Bitcoin purchases made since November of last year. As shown in the figure below. You laugh at others for being too crazy, and others laugh at you for not seeing through it.
- The stablecoin in exchanges reaches a historical high
For example, in Binance, the amount of stablecoins has reached a historically high level. As shown in the figure below.
Is everyone holding coins and waiting to manage their finances? Theoretically, as long as the upcoming market can provide a clear direction (for instance, macroeconomic conditions), then a new round of phase-based trends for certain coins may restart.