1. Powell and the Fed's dilemma: withstand pressure, but interest rate cuts still depend on timing

Fed Chair Powell is indeed facing strong calls for interest rate cuts from the Trump administration, even being publicly accused of 'high rates exacerbating inflation'. However, the Fed currently maintains a 'data-dependent' stance, believing that:

- Inflation remains above target (core PCE expectation raised to 2.8%).

- The job market is relatively robust, with no signs of recession yet.

- Uncertainty in tariff policies may further drive up prices, making interest rate cut decisions more complex.

The market originally expected rate cuts in June or July, but Trump’s tariff policy (such as a 200% tariff on EU wines) may force the Fed to delay action, even intensifying stagflation risks. Therefore, the likelihood of a rate cut in the short term is low unless economic data deteriorates significantly.

2. Has Bitcoin's 'safe-haven asset' narrative collapsed? It resembles a risk asset more.

Bitcoin was initially promoted as 'digital gold' and 'inflation-hedging asset', but in recent years it has performed more like a high-risk tech stock:

- Highly correlated with U.S. stocks: Recently, affected by Trump’s tariff policy, Bitcoin has fallen in sync with U.S. stocks.

- Volatility far exceeds gold: From early 2025 to now, gold has risen by 10%, while Bitcoin has fallen by 10%.

- Institutionalization has increased correlation: The entry of traditional financial institutions like BlackRock has made Bitcoin more influenced by macro liquidity (such as interest rate expectations and dollar strength), rather than solely the 'decentralized' narrative.

However, Bitcoin still possesses long-term anti-censorship characteristics (such as being used for cross-border transfers during the Russia-Ukraine war), but short-term prices are dominated by institutional funds and leveraged trades, resembling a 'high beta risk asset'.

3. The impact of Trump’s tariff war: the general public and retail investors are the most hurt.

Trump's 'reciprocal tariff' policy (such as tariffs on the EU and Canada) has led to:

- Global trade war risks: Rising supply chain costs push up prices, exacerbating inflation.

- Market panic: U.S. stocks, Bitcoin, and crude oil all fall together, causing increased liquidation among retail and leveraged traders.

- Fed's policy dilemma: If they cut rates, it might be interpreted as 'political compromise'; if they don't cut, the economy might face a hard landing.

Ordinary investors (especially contract players) have become the biggest victims as market volatility is amplified, while institutions can hedge risks through derivatives.

4. Investment strategy: Spot trading is preferable to contracts; wait for clear signals.

In the current high-volatility environment:

- Avoid high-leverage contracts: Recent market movements are driven by policy news, making extreme volatility likely (e.g., Bitcoin falling over 5% in a single day).

- Focus on spot trading opportunities:

- Key support level: If Bitcoin holds above $80,000, it may see a rebound.

- Fed policy shift signal: If rate cut expectations heat up, the crypto market may follow U.S. stocks in rebounding.

- Long-term positioning: Growth in RWA (real-world assets) sectors (such as Ethereum accounting for 80%) may become the next narrative focus.

Conclusion

- Powell is unlikely to easily cut interest rates in the short term unless economic data worsens or the market crashes.

- Bitcoin has shifted from a 'safe-haven asset' to a 'high-risk asset', driven by macro policies and liquidity.

- The Trump tariff war intensifies market volatility, retail investors need to operate cautiously, prioritizing low buying and high selling of spot assets.

- A true market reversal requires waiting for a shift in Fed policy or an easing of tariff policies; currently, the market remains mainly in a volatile state.

(Watch more and act less in the short term, focus on BTC 74000 support and ETH staking ETF progress in the medium to long term)