Today, the cryptocurrency market is bustling, with bulls and bears in a fierce battle. Bitcoin slightly rebounded after a sharp drop last Friday but quickly fell back down, now hovering between 85,000 and 86,000 dollars. Mainstream coins like Ethereum and AVAX are also under pressure, but strangely, those crypto assets linked to gold, like PAXG and XAUT, have risen, indicating that people now prefer to avoid risks.
The Trump administration has announced a 25% tax on imported cars; this news has everyone worried about the impact on global trade. The high-risk assets in the crypto market reacted the fastest, already feeling the pressure of capital flight. If this policy is implemented, mining costs will rise by 18%, and market confidence will decline.
The SEC has dropped charges against institutions like Kraken and Consensys, which seems like the Trump administration wants to warm up the crypto market. However, the Treasury Department has frozen a bunch of on-chain assets suspected of tax evasion, indicating that regulation is becoming stricter. But if the USD1 stablecoin issued by World Liberty Financial can pass the review, the cryptocurrency market will have another big player.
Traditional gold and crypto assets linked to gold are both rising, indicating that people are worried about inflation and economic stagnation. Goldman Sachs has even predicted that gold will rise to 3,500 dollars, making those crypto gold tokens a new favorite, as everyone uses them to fight currency depreciation.
A big shot bought 8,201 Ethereum over the past three weeks, spending 15.81 million dollars. Bitcoin whales are not to be outdone, increasing their holdings by 1.8 billion dollars within a week.
The crash on March 28 caused a loss of 340 million dollars across the network. A big player lost 3.08 million dollars and sold 2,140 Ethereum. Institutions like BlackRock suggest buying more stablecoins just in case.
The NFT market is in dire straits, with sales down 63% in the first quarter, only reaching 373 million dollars in March. However, NFT transactions on the Ethereum chain have increased, while those on the Solana chain are struggling.
The Ethereum Pectra upgrade testnet has been successful, and the mainnet is coming soon, which may lead to a market rebound. Layer 2 projects are also starting to make profits, and the market is beginning to value cash flow. Uniswap's trading volume has also reached a historic high, making the competition between DEX and CEX increasingly fierce.
If the market fear index drops, you can gradually buy some Bitcoin and Ethereum. If Trump really implements a crypto strategic reserve, Bitcoin will rise further. If the USD1 stablecoin gets approved, the financial market will change dramatically again.
Today's market fluctuations are a necessary path for crypto assets to transition from small skirmishes to a regular army. Policies, technology, and capital are all at play, and we investors need to stay alert, being cautious of Trump’s Twitter bombs while also watching for signals from the big players buying the dip. After the storm, only those assets that value cash flow, policy dividends, and counter-cyclical logic will be able to laugh last.
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