"The quality of decision-making depends on the information you have and your ability to process that information."
——Bridgewater Associates Founder: Ray Dalio -- (Principles)
Principles: A Classic of Principles
In the early morning, the Federal Reserve held an interest rate decision meeting and decided to keep interest rates unchanged, a decision that was already anticipated by the market. As stated in a previous article (The Federal Reserve Will Not Cut Rates, Trump May Trigger an Economic Recession, Bitcoin Faces a Critical Moment!), the speech by Federal Reserve Chair Powell was the real highlight of this meeting.
He pointed out that quantitative tightening (QT) is expected to end around the second quarter - the Federal Reserve plans to slow down the reduction of its balance sheet starting in April, cutting the monthly redemption cap from $25 billion to $5 billion to slow down the balance sheet reduction.
This 80% reduction actually reflects the Federal Reserve hitting the brakes on its quantitative tightening policy. This is undoubtedly good news, as the market is typically forward-looking, and this change suggests that quantitative easing (QE) may be on the horizon.
Federal Reserve Policy Guidance: Quantitative Tightening - Interest Rate Hikes - Pause on Rate Hikes - Rate Cuts - Slowdown of Quantitative Tightening - Quantitative Easing
With the latest macro events driving the market, the price gap and liquidity of Bitcoin on the Chicago Mercantile Exchange (CME) have been filled. The current key issue is whether this marks a top in the trend, and whether prices will continue to decline in the future.
"My view remains unchanged: whether Bitcoin can stabilize at the daily EMA-200 level will be key to my judgment. I will only be convinced when the price rises back to $90,000."
Regarding downside risks, the potential rebound zone is concentrated between $83,500 and $84,500, particularly the possibility of retesting $83,500 is worth monitoring. These price levels will become important references for market trends in the short term. At the time of writing, Bitcoin's price is below the daily EMA-200 level, trading at $85,123.
In the past 24 hours, large-scale liquidations occurred at more critical levels in the crypto futures market, such as $84,000 and $85,000, with a small amount of liquidations between $86,000 and $87,500.
In the past two weeks, the cryptocurrency market experienced 9 days of liquidations amounting to at least $700 million. Overall, losses in the market have exceeded $10.5 billion in this short period, reflecting the high volatility and risk nature of the crypto market.
Despite the market slump, risk-weighted assets have increased. The deposits of tokenized government bond products reached a historic high of $4.4 billion, with BlackRock's BUIDL surpassing $1 billion for the first time.
Overall, the growth rate in this field has reached an astonishing 490%. This trend brings new opportunities and hope for investors and market participants.
Note: All content represents the author's personal opinions and is not investment advice. It should not be interpreted as tax, accounting, legal, business, financial, or regulatory advice in any way. You should seek independent legal and financial advice, including advice regarding tax consequences, before making any investment decisions.