How to interpret the crypto market under the impact of deadly "tariff drugs"? ｜Trader Observation
Reprinted from chaincatcher
04/08/2025·21DAuthor: shu, BlockBeats
Today's financial market situation is the same as the world. Whether it is the "medicine" meme or the "gold pit", participants in the stock market and currency circle are witnessing the beginning of a chaotic era that has already occurred.
Related reading: " The global stock market is facing the worst 3-day market in 50 years. Can the crypto market still hold on? 》
The Fed is hesitating to cut interest rates, and the market speculates that it has lost its ability to "maintain the bottom line", while Trump uses tariff games to tear market confidence and aggravate external uncertainty. At the same time, the crypto market continues to decline under the dual pressure of technology and emotions, and multiple key support levels are in jeopardy. This article focuses on multi-dimensional macro, policy, market data and technical analysis, and summarizes traders' observations on the current market for readers' reference.
Macro analysis
I think one of the reasons why this round of sell-off still has room for downside is the lack of possibility of "Federal Bottom Support" or "Trump Support". The following content mainly explains why "Feder bottoming" has become difficult to appear:
1. The premise of this round of market decline is to assume that the Fed will cut interest rates five times this year. But all FOMC members said they need to see more "certainty" before cutting interest rates again. Even in June, the Fed may not be able to get enough "clear" inflation guidance. If companies keep stocking up until June (I think it is true), even if a wider price increase ends, it will not appear until the second half of the year. The Fed must wait for a clearer inflation signal.
2. The problem lies in the Fed's own expectations and judgments. If they still see the current situation as a situation similar to 2022 and are worried about inflation expectations being "deaned", then even if the stock market falls by 20%, it will not shake them (this is true in 2022). Judging from the Fed's assessment of inflation risks in its March meeting, they do regard the current situation as another 2022.
3. The Fed will also refer to the inflation forecasts of major Wall Street investment banks. Several major banks have predicted that core PCE will rise to 4%-5%. These forecasts will further dispel their willingness to cut interest rates.
4. The Fed values "hard data". For example, news such as DOGE layoffs will not be reflected in non-agricultural data until the end of the third quarter or the fourth quarter. But the upward trend of inflation data is easier and faster. In other words, the Fed itself is a lagging regulator.
5. Powell cares about his "historical positioning" and he hopes to be regarded as the new generation of Volker. At the same time, he is also carefully maintaining the independence of the Federal Reserve, so he remains neutral in his words to avoid angering the White House. I say "try" because if you listen carefully, you will find that he is actually deliberately downplaying the hawkish stance within the FOMC and the Fed's staff system.
6. During the recessions of the 1970s and 1980s, nominal long-term interest rates did not bottom out until the economy bottomed out. In other cycles, interest rates often bottom out earlier. The current macro environment is more like the 1970s and 1980s than other milder recessions.
1. The final version of Trump's reciprocal tariff is No. 9, so before No. 9, it is more of a negotiation period. At this time, it is too early to define the overall amplitude and impact on the economy. Don't rush to define whether Trump will be impeached.
2. Trump’s high tariff opening and high strike core is to have chips and initiative at the negotiating table. Therefore, it is not necessary to really raise so many tariffs to self-explode. Or destroy your support rate.
3. If you hurt one thousand enemies, you will lose eight hundred of yourself. It is not Trump or MAGA, but the old American money that was the US dollar capital group. So they were anxious at the first time and then promoted a march across the United States, thus using national justice to sway Trump to compromise.
But who told you that Trump has to increase this tariff, and it is very important to increase it so high? If the purpose of the negotiations during the period is achieved, Trump does not recommend reducing the increase in tariffs. Isn't it?
If we look at it from the perspective of God, Trump's seemingly outrageous or even hasty reciprocal tariffs will make the whole world think that he is crazy or stupid, and take this opportunity to complete the negotiations at the negotiating table, internally, stimulate opponents to motivate public opinion to coerce themselves, expose all hidden enemies, and then announce a reasonable tariff equal policy on the 9th. Can that kill more than one bird?
Of course, this angle still needs to wait for the result of No. 9 in the end.
4. Trump’s impact on the current market is in line with our expectations. I don’t know if my friends still remember it during the election. We once said that Trump will have a “pain period” when he took office, but now he is indeed suffering.
But what exceeded our expectations was that no one expected that the "pain" was so strong that we thought he was a lunatic.
Of course, we are scolding Trump now because we are victims of risky assets and the injured party in Trump's "revolution". But if we change our perspective, friends who understand history should know that revolutions and innovations that have occurred in various countries in history require a period of pain, and the beginning of these revolutionary and revolutions was not understood, and they were also affected by the "national justice" brought about by the agitation and protests at that time.
And the historical results we see are just remembering the success of the revolution, but not remembering the pain they experienced. I think Trump is doing the same now.
Many people think that Trump wants to collapse the economy, but from another perspective, even if Trump now creates a recession artificially, if the economy recovers rapidly after the recession and shows enough vitality, then who cares about the pain at the moment?
History is always written for winners, and Trump is obviously not winning now, so don't rush to make a conclusion.
Of course, we originally thought that Trump was performing a "major operation" on the United States, but unexpectedly it was "scraping the bone to heal the wound", so the pain was too painful. Of course, if we find that we will succeed in extending our life to the United States by 50 years old, we will probably be shouting Trump "great".
5. Regarding the pressure brought by tariffs to inflation, Powell has always said before that it depends on whether the inflation brought by tariffs is transmitted to commodities and whether the price increase is one-time. If so, then inflation may not be that scary, because the short-term high prices will cause people to give up consumption or make a substitution.
This is true. If this is true, then inflation may rebound weakly in the short term, but it will lead to a weakening of the demand side, which will lead to a slowdown in economic growth. The maximum possibility of stagflation, and the next step in stagflation is an economic recession.
For the Federal Reserve, policy lags, after all, it cannot exceed the speed of the economy. It depends on the adjustment of the strategy when discovering economic problems. However, the policy lags behind our Master Bao’s expectations and management can be advanced. If stagflation really occurs, the market will expect a recession. At this time, Master Bao can once again use his title as Master of Expectations to adjust market confidence, so as to take action at critical moments, not only to make the economy really recession, but also to better demonstrate the independence of the Federal Reserve.
Of course, tariffs bring inflation, and the worst result is inflation increasing month by month, so this will directly lead to a rise in long-term inflation expectations, which is the most pessimistic situation. Hopefully, it won't be so then.
6. As for the decline in Trump's approval rating caused by tariffs, this is an inevitable short-term reaction, and there is even the possibility of being impeached, but I don't think the probability is high.
Many of Trump's current actions make me feel like a big gamble, and once the bet is won, the approval rating will naturally come, and the "defected" Republican members will also return. Impeachment may just be a short-term red flag and may not be able to really enter the impeachment process.
If you lose the bet, it will naturally be a mess. Even if you are impeached, who else can turn the tide? Faced with this mess, don’t expect the Democratic Party to take the blame, right? I guess at this stage, even the Democratic Party does not want to take over, after all, I am afraid that it will not be able to take over a hot potato.
So, we can only see whether the goddess of luck is on Trump's side in the end.
At present, negotiations between all parties are still in progress, so before the 9th, we can only talk from multiple perspectives. Maybe our discussion is in full swing, and the negotiations over there will be a reduction in tariffs beyond expectations. How can we be peaceful?
BTC fell 5.5%, while ETH fell more than 10%.
There is no clear negative news, and the trading volume is not high. It is not like an institutional market crash, but more like a short-term risk aversion.
It may be that the expectation of tariff countermeasures in Europe and the United States on Monday was released. There was no big panic on the chain, the structure was not destroyed, and more of the exchange memory was sold.
If US stock futures continue to weaken tonight, the Asian session may panic, but as long as there is no recession, I think 70K is still a reasonable support.
I will continue to buy at the bottom in this round, but I will be cautious when the tariffs are implemented and GDP data will be used to make decisions to increase positions.
When there is no reason to fall, it is actually the most worth paying attention to.
Technical Analysis
The latest trend of total cryptocurrency market value is updated:
It has fallen below the dotted trend line on the weekly chart. If this time it is confirmed to fall below, the next reasonable support level is $1.91 trillion.
There is the intersection of the red bull trend line and the long-term trend line (both obliquely supported).
Of course, it is also possible to further fall to the $1.61 trillion position (maybe just a pin, but to be honest, it is not certain). If you really get to this position, the pain level of the market will be unimaginable. Please be sure to prepare in advance... By the way, if this happens, the possible bottom time point is April.
I have started to hang some altcoin bottom orders in a range far below the current price. In addition, the K-line is still nearly 5 hours away from closing, so I am still waiting and watching.
Take one step, look one step.
In fact, this weekend is no different from the previous few weekends, and it is no different from the weekend on February 3. It is a counterfeit fall on Saturday and Sunday, and it turned into a big plunge on Sunday night, falling to Monday afternoon-stop falling at night.
A slow rebound in the downward trend will only lead to a more drastic kill later.
66-72k, who agrees? Who objected?
I have been holding a bearish idea recently. The 72K-66K I mentioned two days ago is about to arrive. At that time, I will look at the rebound and decide whether to enter long positions.
Black Monday: BTC makes up for the decline
ETH lost 1600, and the Taiwan Stock Exchange and Japanese stocks both triggered the circuit breaker mechanism, and we once again witnessed history.
I know that most people are not very happy about such a decline. This article will focus on BTC and directly sort out the important positions mentioned repeatedly before from the perspective of on-chain data analysis for your reference.
First is the "STH-RP after deviation adjustment" model, currently:
Green line = 77,156
Blue Line = 67,554
And 71 K ~ 79 K is still the relative vacuum area of URPD, so from the perspective of on-chain data, individuals are more inclined to wait for positions below 71 K.
Since the trend at the big level is downward, I will regard long operations as "counter-trend operations". I'm not sure how many readers can understand what I mean, but that's the minimum resistance direction for the market.
I know that most people prefer to try to operate bands, but counter-trend operations are indeed one of the most common mistakes that most retail investors make, and this is also the loss I suffered a few years ago as a newborn calf. I hope you can learn from it.
Trading is a process of "cognitive monetization"; when the market difficulty increases significantly, "not operating" is also an operation.
There is no need to chase every small-level band. The smaller the level, the more Brownian movement the price will be; look at the big trend, stick to the batting area, and leave the rest to patience and discipline.
2025 The smoke of chaos has risen, and you and I are all witnesses of history.
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