In the complex game of the financial market, many people only see the surface conflicts and contradictions while ignoring the carefully planned 'script' behind it. For example, the divergence between Trump and Powell on interest rate cut expectations may actually be a carefully designed 'double act'. They seem to deliberately create a panic atmosphere in the first quarter, waving the tariff big stick, causing market unease.
However, by the second quarter, the so-called tariff policy may suddenly become mild, as if the previous hardline stance was just a bluff. At this point, gold prices may experience a slight pullback, while the market's focus will cleverly shift to the Federal Reserve's expectations of balance sheet expansion. This expectation will lead newcomers in the stock and cryptocurrency markets to fall into a state of 'fear of missing out' (FOMO), fearing they will miss the upcoming trends. The real balance sheet expansion may not arrive until the fourth quarter or the second quarter of next year, when the market will usher in a round of 'liquidation crash' trading.
From the market trends, this trend has actually begun to emerge. By the end of the first quarter, that is, at the end of March, the market has already started to show a slight overall rise, which may just be the beginning. By April and May of the second quarter, a large amount of capital surged into the market, forcibly raising liquidity, pushing the overall rise to its peak. However, newcomers in the market often react slowly and fail to detect the underlying secrets in time, thus cannot immediately 'net in' but need some 'reminders' to guide them.
By the end of the second quarter to the beginning of the third quarter, the market begins to strongly guide investors to focus on expectations of balance sheet expansion rather than interest rate cuts. At this time, the FOMO sentiment in the market will reach its peak, as newcomers see a series of positive bullish trends. Driven by this sentiment, mainstream cryptocurrencies may again approach historical highs or even break through directly, even if there is not enough trading volume, they will be forcibly pushed higher.
However, by the middle of the third quarter, after August, gold prices may drop significantly. At this time, newcomers in the stock and cryptocurrency markets are still immersed in previous gains, believing they have avoided the market's harvest and continuing to indulge in the FOMO atmosphere. At this point, mainstream cryptocurrencies may enter a sideways or bearish state. Ironically, it is only when the bull market has ended that everyone starts talking about the 'altcoin season' (referring to the rise of smaller cryptocurrencies in the market). Because in April and May of the second quarter, many people were not yet aware of the changes in the market, subconsciously hoping to earn a bit more, thus subjectively expecting the bull market to last longer.
By the fourth quarter, the market will enter the initial harvesting phase. At this time, everyone may believe that the high-level sideways movement of mainstream cryptocurrencies is a stable performance, while the market will vigorously hype the expectations of balance sheet expansion, describing the inflow of funds after expansion as extremely fierce and intense, even directly declaring it as an 'eternal bull market.' In short, the market will use all means to keep newcomers in the field, not to leave easily.
By next year, the market landscape will become more complex. Investors may find themselves in a more difficult situation, while those who have positioned themselves early will seek opportunities amidst market fluctuations. In this process, investors need to be more cautious, not be misled by short-term market fluctuations, but instead deeply analyze the underlying logic and trends.
