Source: Talk about Li and Outside
This morning (April 10, Beijing time), the market showed a rebound again. I believe everyone knows what happened because the U.S. tariff policy has changed again. Trump announced: Over 75 countries have contacted the U.S. hoping to negotiate and have not taken retaliatory actions. He has authorized a suspension of this measure for 90 days, imposing only a 10% reciprocal tariff (with China being the exception, where the tariff rate will increase from 104% to 125%). As shown in the chart below.
Affected by Trump's policy news, the U.S. stock market began to rebound quickly, and at the same time, the cryptocurrency market also saw a corresponding rebound, as shown in the chart below.
In the previous article (April 7), we revisited Trump's tariff policy from the perspective of taxation and mentioned that the market seems to be completely influenced by Trump's policies. Today's market still shows that Trump's influence remains significant.
One Trump, one Powell (Federal Reserve), these two old men directly influence the trends of global financial markets. For most retail investors who have lost money (or are in floating losses) due to recent market volatility, the only thing they likely want to say is: those old men are really bad.
1. Review of Trump's tariff policies.
Next, let's briefly review a series of Trump's maneuvers regarding tariffs since the beginning of this year (Eastern Time):
On February 1, Trump announced a 25% tariff on most goods from Canada and Mexico, while imposing a 10% tariff on Chinese goods.
On February 3, Trump announced a 30-day delay in the implementation of tariffs on Canada and Mexico.
On February 4, the U.S. tariff policy on China officially took effect.
On February 24, Trump announced that tariffs on goods manufactured in Canada and Mexico would be reinstated on March 4, including a 25% tariff on most products and a 10% tariff on Canadian energy imports. At the same time, he revoked the tax-exempt treatment for low-value goods under $800 from these two countries.
On February 27, Trump announced that starting March 4, an additional 10% tariff would be imposed on all Chinese-made imported goods (raising the total tariff rate to 20%).
On March 4: The U.S. officially imposed a 25% tariff on most goods from Canada and Mexico (with exemptions for some products) and imposed a 20% tariff on all imported goods from China.
On April 2, Trump announced a basic tariff of at least 10% on all imported U.S. goods (involving over 100 countries and regions) starting April 5. On April 9, an additional 34% tariff was added on China (cumulative total has increased to 54% with the previous 20% tariff).
On April 5 (00:01), the U.S. global tariff of 10% on relevant countries officially took effect.
On April 9 (00:01), the U.S. higher 'reciprocal tariffs' on specific countries officially took effect, totaling 104% on Chinese imports.
On April 9 (around 1 PM): Trump announced a 90-day suspension of reciprocal tariffs imposed on multiple countries, implementing only a 10% basic tariff, excluding China (the tariff on China was raised back to 125%).
Here we have just listed the approximate timelines of several rounds of tariff wars. Specifically, everyone can compare these with the corresponding market price trends. Especially since topics involving the game between the two major countries seem relatively sensitive, we won't discuss it further.
Negotiations will likely happen sooner or later; they may have already started sending representatives to negotiate secretly. It just depends on how to find a suitable step down. Trump, as a businessman, will not suffer losses, and on the other side, they will likely be fine as long as they can save face.
2. What should we do now?
Yesterday, a partner left a message asking me: What should we do in this market situation? Should we sell part of our positions first?
Such questions actually do not have standard answers; everyone’s situation is different. It mainly depends on your holding cost. Since Trump’s tariff policies are always fluctuating, it seems that the short-term market has no bottom in sight, and it may be accompanied by continuous and severe volatility.
If your current positions are seriously affecting your sleep and you are still in a fully invested state, you might consider reducing your position by a certain ratio to maintain a level of liquidity, thereby reducing anxiety. Additionally, this issue also depends on your time expectations. There cannot be a market that only rises forever, nor can there be a market that only falls forever. Currently, there are mainly three basic approaches:
One is to ignore short-term volatility, continue to accumulate more quality assets like BTC at lower prices, and hold long-term (in units of years).
Second, based on individual overall position sizes, holding costs, and risk tolerance, you can partially reduce your positions while maintaining a certain amount of liquid funds to observe changes.
Third, you can look for swing trading opportunities using market fluctuations, but the relative risk will be higher and may require a certain amount of time, effort, and skill. (In units of days)
Alternatively, as mentioned in our previous article, if you don't know what you should do, the best action right now is to 'not take action.'
In summary, for most ordinary investors, our advice remains unchanged: no matter when, always try to ensure that you have at least 10-20% of your portfolio in liquid funds, and always invest with a position that feels comfortable to you. For long-term investments, focus on the target (e.g., Bitcoin) without worrying too much about short-term price fluctuations. For short-term investments, think in advance about the maximum retracement you can tolerate, and strictly set stop-loss and take-profit levels to avoid getting deeper into trouble.
3. A brief discussion on the cryptocurrency market.
Recently, everyone has been focusing on Trump's tariffs while hoping the Federal Reserve will take some substantial actions... various spectators, critics, and those discussing the global situation... As for the cryptocurrency market itself, it seems there are no particularly hot topics anymore, or rather, people are now generally less focused on or discussing any specific crypto projects.
Although many people now say we are in a full bear market, regardless of others' perspectives, from a long-term view concerning Bitcoin, we still believe it is bullish, and the current position of $76,000 also seems to be a decent support level, as shown in the chart below.
In layman's terms, from a weekly level, we still have a certain probability of encountering a good new opportunity this year.
However, in the short term (daily level), due to the continued uncertainty of Trump's policies, we may experience further volatility and fluctuation in the near future. Theoretically, this fluctuation process could last 2–3 months or even longer, depending on whether any new black swan events occur later. As for where Bitcoin will continue to retrace during this process, whether to $72,000, $68,000, or some KOLs saying $55,000, we do not know.
We believe the core issue in the market is still a liquidity problem, meaning the market may continue to face liquidity shortages in the coming months unless the Federal Reserve takes some concrete actions. This liquidity shortfall is also due to several factors, such as the U.S. tax filing season in April (which requires Americans to file income tax by April 15 for the previous year), which may lead to some selling pressure, the U.S. debt ceiling issue that urgently needs resolving (the federal government may be unable to pay bills as early as August), and the rising probability of a U.S. recession (JP Morgan has raised the probability of a U.S. recession to 60%)... etc.
At this point, some partners may ask again; in your previous article, didn't you say that M2 is currently in a growth state? How can you say there is liquidity shortage now?
Here we need to make a simple supplementary explanation. M2 refers to the broad money supply, which is a macroeconomic indicator measuring the total amount of money (fiat currency), mainly including cash in circulation, demand deposits, and savings deposits. A higher M2 indicates more money, which typically represents ample global liquidity. However, ample liquidity does not necessarily mean that this liquidity will immediately inject into the market, meaning M2 is a static quantity while liquidity is dynamic.
In a previous article (April 1), we mainly predicted (speculated) the possible direction of Bitcoin through the trend of Global M2, as shown in the chart below.
In simple terms, we can use the Global M2 indicator to predict (speculate) the possible future trends of Bitcoin, meaning as long as M2 rises, BTC is likely to rise too (just with a certain lag in time).
The Global M2 indicator is more suitable for observing the trends of BTC compared to directly assessing altcoins. The current situation of altcoins is quite special; for example, the number of altcoin projects has surged (see our previous series of articles on the altcoin season). If you hope to see more significant opportunities in altcoins, you may need to observe changes in market liquidity on a larger scale or level, such as if the Federal Reserve really starts to cut interest rates, leading to liquidity spillover effects.
If the assumption we made in the previous article still holds, or if you believe in this point, then whether it is the current Bitcoin price of $82,000 or if it may continue to drop to the $70,000 or even $60,000 range, you can still consider accumulating in batches within the current fluctuation range.
Of course, this accumulation is just Plan A. To cope with possible market changes, you also need to have a Plan B in place. This means if you encounter new black swan events or significant changes while executing Plan A, such as the crossover of the 21 and 55-week lines in the K-line chart above, indicating a complete shift to a bear market, you need to be prepared mentally to hold on for several more years.
As for our own plan, we will maintain our current strategy, which is to continue holding onto Bitcoin. The selling plan will be strictly executed in accordance with the established target settings for gradual reduction. So far, we have only executed one selling operation in December (2024). As for the new round of fixed investment buying plan, we will tentatively consider or execute it starting in the third or fourth quarter of next year (2026). We have shared these matters several times in previous articles, so I won't dwell on them here.
2025 seems pessimistic so far, but this year is destined to be extraordinary. The global situation is changing, and macro cycles are shifting. If you can endure this winter, you will have the chance to see the next spring's flourishing.
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