Today is April 14, 2025, Monday. Recently, there are two key factors in the market worth paying attention to: one is the tariff issue, and the other is the interest rate cut issue. First, regarding tariffs, the main impact currently is on imported cars and parts. However, there are signs of easing in the tariff negotiations with China, and it is likely that some positive news will be gradually released. The most stringent tariff plan from early April is basically unlikely to be implemented, so the pressure from tariffs will gradually decrease. But aside from tariffs, the economic situation is currently the most troublesome issue. If the economy is too good, the Federal Reserve won't be in a hurry to cut interest rates, so the market's expectation for a rate cut in June is unlikely to be advanced. The key will still be the GDP data released at the end of April, which is particularly critical.
Now let's talk about who are the altcoins. Recently, I looked at the exchange rate of altcoin market value. Last week's weekly chart closed with a doji star. Many friends may not understand what this indicator is for. Simply put, it is used to gauge market sentiment. If the exchange rate of altcoin market value rises, it indicates that altcoins are performing better than Bitcoin, with funds flowing into the altcoin market. Conversely, if the exchange rate of altcoin market value declines, it indicates that funds are flowing out of altcoins, and Bitcoin is more favored by the market. Last week's weekly chart closing with a doji star also indicates that the current market's bullish and bearish forces are temporarily balanced, and a change in trend may occur.
So based on the above judgment, the current situation in the altcoin market is indeed a bit tangled. The situation facing altcoins is that if the market value of altcoins continues to decline, there may still be a 22% downside risk, and the risk of loss is not small. On the other hand, the current market expects that the Federal Reserve will soon cut interest rates, so liquidity may start to improve. At this time, if one continues to focus on shorting altcoins, it seems not very worthwhile.
Additionally, Bitcoin's weekly chart currently shows signs of bottoming out. If, hypothetically, the market really starts to rebound, similar to the end of 2021, leading to a collective surge in altcoins, then there would indeed be no need to continue to short.
Thinking about it, altcoins have already suffered enough in recent years. Those still holding them are either deeply trapped or have already cut their losses early. Many in the market have lost hope in altcoins. This means that the most torturous time has likely passed. Furthermore, if one buys altcoins now, even if the direction is wrong, the worst-case scenario is that they continue to drop, triggering a stop-loss if a new low is breached, which is about a 5% stop-loss, a risk that is bearable. More importantly, the most intense period of the trade war has passed. Although the Federal Reserve hasn't directly indicated they will inject liquidity, the balance sheet is indeed expanding, and the expectation of a rate cut in June remains. In other words, the suffering you endured in the past few years with altcoins has probably paid off the tuition fees. If the global economy enters a loosening cycle, altcoins may experience a significant surge, which is worth focusing on more than the current slight downturn.
So, although now may not be the best time to bottom fish in altcoins, it might still drop a bit further. However, it is indeed time to start paying attention to some stronger-performing coins, especially those that outperform Bitcoin or newly launched coins. This way, one can defend against losses while not missing out on potential opportunities for growth.
Let's keep it simple for today. See you in the next episode!