1. First, let's talk about the U.S. government. After Trump took office, he verbally supported blockchain and Bitcoin reserves in various ways. From the moment he was elected, institutions and large holders went all in, causing Bitcoin to surge from below 70,000 to around 100,000. The Federal Reserve did lower some interest rates; there's no use saying anything else; lowering rates is the most important thing. As for the subsequent situation, we have all seen it; Bitcoin surged and then fell back, gradually forming a downward channel. From a technical perspective, the 4-hour chart has already shown a very unfavorable downward trend. To break this trend, new funds need to enter the market, which means lowering interest rates... However, the current situation for the U.S. government is that they are about to run out of funds to support the current government expenditures. If this continues, the U.S. government will soon face another shutdown in June.
2. Let's talk about the Federal Reserve. Does it listen to the commands of the U.S. government? The answer is no; it is an independent financial institution outside of the U.S. government. It lends money to the U.S. Department of the Treasury, which must repay the Federal Reserve with interest on the loans. What are the key factors driving the Fed's decision to lower or not lower interest rates? (1) Controlling inflation (CPI): If inflation is under control, there is no desire to lower rates. (2) Controlling the unemployment rate and promoting employment to ensure steady job growth. Currently, the U.S. government's employment data is still decent, so there is no expectation or momentum for rate cuts. (3) Economic growth (GDP): If there are no significant recession risks, there is no room to lower rates. Currently, these three aspects are doing well, so the Fed basically does not need to lower rates. If the Fed lowers rates, the money it collects will decrease.
3. However, for our understanding king, he still needs the Federal Reserve to lower rates. During the campaign, there was a very important promise; he needs to bring manufacturing back to the U.S. to create more high-paying jobs. But whoever comes back to build factories will need to borrow; no one can use only their own money. Therefore, the current interest rates are deterring businesses. Now Trump needs to create a very good financing environment by lowering rates. However, the Federal Reserve also needs to make money; it only focuses on the three factors mentioned above. What to do? A normal process takes a long time to achieve, but our understanding king can't wait. So now, through artificial means, he wants to lower CPI or reduce employment, with the intention of causing a slight economic recession. Only when an economic downturn occurs can it facilitate rate cuts. For instance, Musk is cutting many inefficient government departments, tightening spending, and starting mass layoffs, which ultimately leads to rising unemployment. Those laid off will eventually cut back on spending, and the consumer data in the U.S. will also decrease (the U.S. is a consumption-driven country). The earnings reports of U.S. listed companies will decline, ultimately causing the U.S. stock market to drop. We have seen the recent volatility and decline in the U.S. stock market, which is actually due to artificial intervention.
4. As for the current cryptocurrency market, it is basically linked to the U.S. stock market because BTC's ETF and ETH's ETF are related to it. Therefore, the current situation in the cryptocurrency market is not good. At this stage, my holding strategy is to short at highs. Some time ago, I shorted BTC and ETH when Ethereum rose to around 2050; I closed part of my position around 1950 and am still holding the rest, adding to my position at highs. For BTC, one has to be a bit cautious; the strategy remains unchanged: short at highs.
For us now, the advice I give everyone is to first see the trend clearly. How does that saying go? The trend is heaven, the key point is earth, and the signal is in the middle. Today, on the weekend, I felt inspired and randomly wrote a segment. It may be a bit messy, so I hope everyone can be forgiving. The thoughts and meanings I wanted to express are already clear. Finally, I wish my brothers prosperity.