I think this round can be said to be the most brutal bull market in history, and no one would disagree. Its severity even surpasses that of the 519 incident. Many times, when institutions enter the market, they indeed bring in incremental funds, but their entry also means that the game changes from normal difficulty to hellish difficulty. Many seasoned investors not only made no profit but also suffered massive losses, let alone ordinary new investors who, without a super experienced mentor, would be putting their lives at risk. We have been cautiously bearish since December, and our trading frequency has been very low. Besides catching 2-3 major bottoms, we have mainly exited in segments and gradually dollar-cost averaged in. In recent days, Ethereum has repeatedly tested 2000, hovering around 1990. Many people couldn't help but ask me if it could break through. My answer was always to wait a bit longer, and today it dropped directly to 1800. If you were in the group, would that 10% loss have been avoided?
Recently, the most frequently asked question is whether the bull market is still ongoing, and if it is, when it might arrive. My first answer is that the bull market is still there, and there is a high probability that we will see a significant bottom this month. To explain the logic, the basis for determining that the bull market is still ongoing is that Bitcoin has created such a strong momentum; it's hard to imagine that it would end just to cut off 50% of the retail investors. Secondly, the Federal Reserve has not officially started QE yet, and finally, Bitcoin's 30% pullback from its peak is a normal retracement during an upward trend. Adding to this, the intuition of seasoned investors leads me to believe there is a 70% probability that the bull market is still intact.
Yesterday, we discussed what Trump is actually doing. Many people are left confused by this performance artist. If we set aside the details and look at the core issue, it becomes very simple. As the saying goes, "All are seeking profit, and all are fighting for benefit." This holds true even for the U.S. overall. So, I just need to find out where this profit comes from. We know that money entering a pocket is either income or debt. There is no third way to have money in your pocket other than these two. Hence, we see Trump ramping up tariffs, which does increase income but is only a drop in the bucket. Therefore, the remaining option is to take on debt. This is why you see her series of seemingly cryptic actions; the real purpose is just to sell U.S. debt.
However, now various countries are worried about the default on U.S. debt; not only are there few buyers, but there is also constant selling. Revenue is not keeping up, and no one is willing to take on debt; this is a deadly situation, equivalent to losing the source of economic income. If this continues unchecked, it will surely end badly, so the U.S. will certainly not sit idly by. At this point, someone might ask, can't we just print money to pay off the debt? Theoretically, it is possible, but there is a side effect: it can lead to a significant devaluation of the currency, severely threatening the dollar's credibility and turning it into worthless paper. Therefore, before cutting interest rates and flooding the market, two actions are needed: one is to let other countries' currencies devalue relative to the dollar first, meaning that the other countries can't withstand the interest rate cuts and expanded balance sheets; the second is to ensure that as much of the dollars in the market flow back to the U.S. as possible. Only then can they print as much money as possible without a significant devaluation of their currency.
But the current situation is that no one is buying U.S. debt anymore; not only is there no money coming in, but also the previously printed dollars cannot be returned. So we can see the recent series of actions he's taken, like the trade war, continuing to stage dramas with Zelensky to prevent a ceasefire in Russia and Ukraine, promoting narratives about a U.S. recession, and targeting Australia, etc. These are all artificially created "crises." This kind of crisis isn't necessarily a real crisis but rather a kind of "expectation" of danger. With this uneasy expectation, people's risk-averse emotions come into play, prompting them to buy U.S. debt. At that point, by igniting the stock market, money from the stock market can be continuously shifted towards U.S. debt, creating operational space for future liquidity injections.
So, since liquidity needs to be drawn out, it naturally follows that assets must first be crushed in price before flooding the market with liquidity, making it more cost-effective. First, mindless money printing must have a legitimate reason; you can't just print money for no reason. Only when everyone is about to collapse can you justify the action of flooding the market. This not only harvests retail investors but also earns a good reputation, implying that it's your own fault for not being strong enough. I'm not trying to defend this, but it's just how it is. Furthermore, if asset prices are high at this time, the attractiveness of assets to cash will decrease. Once that money enters the goods market, inflation will explode, turning money into worthless paper, so the only option is to continue inflating the bubble.
Therefore, the key to the bull market lies in the timing of the Federal Reserve's balance sheet expansion and money printing. As long as the Federal Reserve does not initiate QE, it will be very difficult to see a rush of altcoins. But when it will drop, I don't know. However, it is likely that it will certainly happen when the market is about to be unable to sustain itself; only then will help appear. The indicator of this is a 20-30% drop in the stock market; that may be when the significant bottom appears, so we can only wait. But I believe this time won't be too long, as I have often overestimated the time for a pullback. A major reason for this is that U.S. debt interest rates cannot hold up; Trump must navigate through the encirclement by China. However, there is a distinction between flooding the market with a deluge vs. a gentle stream, and the logic behind those is different. Therefore, the method the U.S. chooses to flood the market will also affect our expectations for the bull market.
I have navigated the market for many years and am well aware of the opportunities and pitfalls. If your investments are not going well and you feel regret over your losses,
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