Extremely dull market
Short-term investors have seen their market value drop from $443 billion to $282 billion, which is one of the most important factors for the market's short-term weakness.
The Bitcoin halving in 2024 and the US approval of Bitcoin ETFs will usher in a Bitcoin bull market, but due to the Fed's high interest rate environment and the continuous harvesting by VC institutions, the altcoin sector without new ecological narratives will continue to decline.
From past cycles, the birth and continuation of a bull market require two conditions: ecological narratives and US monetary easing policies. Both are currently lacking, which has led to the current differentiated market.
Time window: From historical fluctuations in financial markets, every major bull market is preceded by a catastrophic market crash event, which wipes out all long positions or forces investors to sell at a loss. Only then will a bull market emerge, and it will be lighter.
Due to the excessive harvesting by VC institutions in this round and the disconnection of Ethereum liquidity, the development of the ecosystem has indeed been suppressed, but there is still a foundation for an outbreak. Institutions are waiting for an opportunity: preferably another major market crash, after which either the ecological narrative will rise or the Fed will implement monetary easing.
Trump is preparing to use all means to strengthen dollar hegemony + reduce debt + help the US economy 'detoxify'
Short-term recession in the United States
Planning a trade war + short-term recession is one of the means, aimed at forcing the Fed to ease and release dollar liquidity. Only when liquidity is released will we see a true bull market.
However, the trade war and short-term recession are following the script. They seem chaotic but are essentially controllable, and the outcome will still lead to a bull market.
I personally believe that BTC is unlikely to fall below 70K. As I mentioned before, the fundamentals are still very stable, and 70K to 75K is a reasonable range for bottom fishing.
Bitcoin strategic reserves
The Trump administration will purchase BTC for strategic reserves, but not with taxpayer money; it is likely to operate through the sale of existing government assets.
US states with large reserves of dollars and euros, as well as other countries, will likely follow suit, not to flatter Trump, but because this operation itself is very profitable.
So I completely believe that there is an opportunity for the market to drop and then join in.
