After the formal announcement of the tariff policy, it marked the arrival of the bearish projections for the U.S. stock market at -16% and BTC at -35%, which also signifies the end of the largest short-term negative event and the profit-taking from the previous short positions, preparing to initiate phase-long positions.
First, this round of long position strategy is divided into two phases;
Phase 1: Confirmation of the bullish trend
Phase 1: Technical aspects and the arrival of phase space for technical rebound long positions
That is, in February, the U.S. stock market fell by -10%, while BTC fell by -30%. This long position is for a short-term rebound, and the reason it is short-term is that the tariff policy had not yet been fully published at that time. Therefore, it was mentioned in (the historical pattern during the decline of U.S. stocks and BTC - predictions for the second quarter) that this rebound is limited;
Phase 1: Selection of tokens for long positions
1) Choosing to go long on BTC is the first choice because BTC represents the trend and is undoubtedly an option that must be taken.
2) The principle for choosing MKR is based on the strong rotation of leading tokens that have shown long-term anti-drawdown in non-rotating sectors; MKR, as the largest market cap leader in the RWA sector, has a completely different cycle compared to BTC, always dropping before BTC and rising before BTC. During December 2024 to January 2025, MKR was in a severely oversold sector (excluding OM strong coins), with a decline greater than other sectors. Meanwhile, from early January 2025 to the end of February, when other sectors followed BTC with significant pullbacks, the RWA sector remained completely anti-drawdown, even though BTC occasionally experienced minor fluctuations, the rebound was quick and significant.
3) The principle for choosing SATS is also based on the long-term anti-drawdown and profit-loss certainty of non-rotating sectors; although the BTC ecosystem has been underperforming, it showed resilience during the pullback of other sectors from January to February, while other sectors were rising and BTC was only slightly following the trend, making it a relatively stable token. So, while it was still in a state of stability and had not yet surged significantly, it was chosen for a long position.
Phase 2: Confirmation of the bullish trend
Phase 2: A strong rebound in long positions after the negative impact of the tariffs was fully realized at the beginning of April.
The reason for this firm bullishness is that with economic data remaining temporarily unchanged, the realization of tariffs represents the largest negative impact, marking the end of a phase of negative sentiment. In my view, the impact of the tariff events consists of two parts: one is the policy realization, and the other is the impact of tariffs on macroeconomic data. The latter has not been fully priced in and still has the potential for decline, but the extent of this decline is limited; when U.S. stocks drop to -20%, it is a time of extreme market panic, and a short-term decline driven by emotion or policy will not fall below this point. Therefore, at this moment, a firm bullish stance can be taken, but it should be a tentative long position. Continuing to hold long positions until BTC reaches 92,000 is based on the CPI data released in early April because, under the extreme panic in the market, the labor market has remained relatively stable. The only comfort for market expectations is the stability of CPI; stable CPI data can sustain upward movement until PCE data comes out. Between the beginning and end of the month, the market's tensions regarding tariff policies are mostly digested, and the event trajectory also belongs to the end of negative sentiment. As for the expectations around the end of April and the beginning of May regarding tech earnings reports, they are expected to be stable and unlikely to have major misses. For instance, Tesla's earnings report was well below expectations, and the decline in market share in Europe in December 2024 and January 2025, as well as the decline in sales in the Chinese market, has already been priced in. Nvidia's Singapore incident was also anticipated and is considered an expected event, thus priced in advance. (The timing for the final strategy has arrived much quicker than anticipated, but regardless of the reason, the established strategy should strictly take profits, so the long position for this wave was closed at 92,200.)
Phase 2: Selection of token pairs for long positions
1) Choosing long positions in BTC is undoubtedly always the first choice for going long, but it remained a short-term strategy until CPI was released, at which point the strategy took long positions from 82,000 to 92,000.
2) The principle for choosing MKR is based on the independent anti-drawdown performance of leading tokens.
3) The principle for choosing PENDLE is based on the strong rebound of fundamentally oversold tokens; PENDLE is among the best tokens in the LRT sector, consistently performing well after each round of declines and subsequent rises. In the recent decline in February and the rebound in early March, PENDLE led the strong upward movement, so in the second round, I chose to continue going long.
4) The choice of RENDER is based on the principle that the AI sector has not rotated and has been oversold; the AI sector has been in a downward trend from December 2024 to March 2025, continually hitting new lows during declines. However, the AI sector is an emerging sector; events like DEEPSEEK and Nvidia's Singapore incident have impacted it, and it has been one of the few tokens that did not rebound during the BTC rebound, reflecting the end of negative sentiment without entering a new round of increases.
