The macro environment has changed drastically, has the crypto bull market ended?

After experiencing the most painful Spring Festival in history, the crypto market seems a bit cold.

The Chinese people celebrate the Spring Festival all over the country, but behind it is a mess. I thought that after Trump officially took office, a bright future for encryption was just around the corner, but on February 3, the crypto industry and even the global market ushered in a blow to the new president.

Against the backdrop of a new round of tariff war in the United States, the global financial market has encountered a roller coaster. On the day of the news, all three major U.S. stock indexes closed down, and the Asia-Pacific market shocked significantly. South Korean stock market plummeted by more than 2.8%, Japanese stock market fell by 2.48%, and Hong Kong stocks fell by 1.9%. Although the tariff policy was postponed by a month on February 3 due to the subsequent surrender of Mexico and Canada, the crypto market has faced a blow in uncertainty.

BTC price fell sharply, reaching a low of $91,100, a day drop of about 7%. Ethereum once plummeted 25%, reaching the lowest level in nearly a year, reaching a low of $2080.19, reaching the lowest level in nearly a year. Tokens with the top 200 market caps generally fell, Epic The level of liquidation was born from this, with more than 720,000 people losing their positions on that day. According to industry insiders' estimates, about US$8-10 billion was actually liquidated.

This incident seems to have become a watershed. Although the news has been frequent and mainstream currencies have rebounded, market sentiment still shows high fragility, and the fluctuations in the currency price are even more intense. The counterfeit sector has performed sluggishly, even with the previously strong AI The sectors are all silent because of the emergence of Deepseek.

Has the bull market ended? This issue has gradually fermented in market discussions.

In fact, in the context of the crypto market 's high reliance on liquidity increment, the main game point in the current market lies in the two major directions of the Federal Reserve's monetary policy and Trump's crypto policy.

The Federal Reserve's monetary policy points to global liquidity. The importance of this indicator can be seen by Powell's hawk in December last year, which caused a sharp drop in the market. Because of this, the world is showing unprecedented attention to US inflation.

In the early morning of January 30, Beijing time, the Federal Reserve suspended its previous three consecutive interest rate cuts, maintaining the target range of the federal funds rate at 4.25%-4.5%, in line with market expectations. Compared with the December 2024 interest rate statement, this statement deleted the statement that "labor market conditions have gradually eased" but emphasized that the unemployment rate remains at a low level. At the same time, the statement that “inflation has made progress towards the 2% target set by the committee” was deleted.

On February 9, the US Department of Labor released a non-farm report that the U.S. unemployment rate in January was 4%, with 143,000 new jobs added. According to Fed Director Coogler, the data suggests that “the labor market is in a healthy state, neither weakening nor showing signs of overheating.”

The market is very active, and even the University of Michigan data that was not paid attention to before has had a direct impact on prices. A survey released by the University of Michigan showed that consumer expectations for inflation surged a full percentage point to 4.3%, the highest level since November 2023.

Affected by this, Bitcoin's $100,000 that had finally risen, and once it returned to the pre-liberation period, it began to fluctuate around $96,000, and ETH also always hovered around $2,700. The mainstream coins performed poorly, and altcoins continued to fall.

From a macro perspective, the Fed 's prudence is understandable, especially the tariff stick launched after Trump took office, which has made the global risk aversion increasingly strong. All signs show that tariffs have become a good hammer in their hands. They can not only be used as a diplomatic means to achieve border security, but also as an economic means to promote the return of manufacturing and further reduce the federal deficit as a way to increase income.

After launching tariff threats to North American neighbors, the prototype of a full-scale trade war in the United States has emerged. Although in the long run, as long as the United States controls the targets and products, such as conservatively treating Canadian crude oil and Mexican agricultural products, other commodities are still controllable, but increasing tariffs combined with policy proposals such as expelling illegal immigrants and embracing fossil energy, the inflation The rise is still very likely to be inevitable.

In order to prevent external uncertainty and give more room for policy maneuver, conservative wait-and-see is an objective strategy that the Fed needs to adopt. At present, most US money markets believe that the Fed may cut interest rates in June or July, but the pricing of interest rate cuts throughout the year has not reached twice. Judging from the recent interest rate cuts in March, CME's "Federal Observation" shows that the probability of the Fed's interest rate unchanged in March is 92%, and the probability of a 25 basis point cut is 8%. Not cutting interest rates in March has become a market consensus.

Uncertainty is not just outside, but the inside is not calm. Under the DOGE department's "slash spending", the U.S. internal affairs are also becoming chaotic. The official website of the Consumer Financial Protection Bureau (CFPB), the highest financial regulator in the United States, was once paralyzed. Just a few days ago, Musk was Calls for impeachment of New York District Judge Paul Engelmayer for orders to temporarily restrict the DOGE team's access to the U.S. Treasury Department's payment system and sensitive data. Trump's authority is fully demonstrated by Musk's development, but the relatively subtle competitive and cooperative relationship between the two is also being discussed by the market. All kinds of farces will only promote capital flow into safer areas.

In addition to the adverse macro effects, Trump 's authority also has a bright spot in encryption. Institutional departments that once opposed encryption are facing a full liquidation.

The SEC was the first to be hit. Gary Gensler's departure led to resignation with several senior legal officials. The lawsuits and Wells notices, which were once very scared by the industry, are gradually fading away. The SEC has begun to reduce the scale of crypto law enforcement. The direct advantage of SEC's turn is ETFs, and altcoin ETFs are accelerating.

The SEC recently received a series of applications related to cryptocurrency ETFs, including the Litecoin ETF submission submitted by Grayscale, and the proposal proposed by BlackRock to allow iShares Bitcoin ETFs to be created and redeemed in physical form. Cboe also submitted four orders. Listing and trading applications for ETFs tracking XRP prices. From the current perspective, due to the lack of participation of large capital giants such as BlackRock and Fidelity, the amount of funds passed by altcoin ETFs is not significant, but physical redemption and the possible ETH pledge application still have significant increases in the subsequent sentiment. Vibrate.

The Federal Deposit Insurance Corporation (FDIC) has also changed significantly, and before that, the institution even pressured banks to refuse to provide services to crypto customers to cut off traditional finance from cryptocurrencies. But now, the FDIC announced that it is actively reevaluating the regulatory approaches to cryptocurrency-related activities, including withdrawing and replacing the Financial Institution Letter (FIL) 16-2022), providing a compliance path for banking institutions to make them in Comply with the principles of security and robustness while participating in cryptocurrency and blockchain-related activities. This move means that cryptocurrencies will soon be integrated into the traditional financial system to expand the value chain, which not only enhances the security of the crypto field, but also lowers the threshold for individual users to participate in the crypto industry, laying a strong foundation for stablecoins, Payfi, BTCfi and other directions.

In addition to both, the White House's cryptocurrency organization department also brought better news. David Sacks, the head of the company, adheres to the slogan of "building a golden age of digital assets together" and takes on the Bitcoin reserve market, which is highly concerned by the market. issue. According to its speech at the press conference, Bitcoin Reserve will be included in the research topic of the White House Digital Assets Working Group and evaluate its feasibility within 180 days.

In addition to the top leaders of the United States, major states have also taken the lead in applying for Bitcoin strategic reserves. 15 states including Alabama, Arizona, Florida, etc. have currently launched plans for Bitcoin strategic reserves, including Arizona and Utah. The state progress has transitioned to the approval stage of both houses, and it is only one step away from being approved as a law.

According to the previous statements of the White House, the Bitcoin reserves at the US national level focus more on the existing currency rather than incremental purchases, but for the strategic reserves of each state, the imagination is better, whether it is to use pension purchases. Or public finance purchases, these are real incremental funds, which will directly bring purchasing power, thus giving more support to the currency price and pushing up the Bitcoin price. At this stage, Trump's policy favorability is still continuing, and the US sovereign wealth fund under his executive instructions is also speculated by the market that it may be possible to purchase BTC.

Overall, Trump has spared no effort in supporting encryption after taking office, and has invested in administration, supervision and funding. The positive news has been one after another. However, in the market, the dismal altcoins can be seen in the naked eye, BTC and The ETH rise is not optimistic either.

In the final analysis, the market sentiment is too fragile, and macro expectations are greedy for investors. Risk-avoidance factors lead investment and turnover decreases. However, due to the favorable existence, the mainstream currency chip gathering area is relatively stable and has not triggered. The sharp drop, taking Bitcoin as an example, the range support of US$93,000-98,000 is highlighted. Even if it briefly falls below 91,000 during the Spring Festival, it will recover quickly in the future.

Judging from the institutional trends, confidence in the future is still there. Although the market is in garbage time, institutions are still buying. According to SoSoValue data, from February 3 to February 7, the single-week net inflow of Bitcoin spot ETF was US$204 million, of which BlackRock IBIT was US$315 million. At the same time, Ethereum spot ETF had a net inflow of US$420 million in a single week, and none of the nine ETFs had a net outflow. Since late January, the cumulative inflow of Ethereum spot ETFs has exceeded US$500 million.

Institutions are willing to invest and are obviously optimistic in the long run, especially ETH, which continues to be FUD. Although the market selling pressure is strong, in terms of the layout of BlackRock, Fidelity, etc., ETH still has hype themes, whether it is pledge or RWA. From the market perspective, due to the lack of strong positive effects in the short term, Bitcoin maintains fluctuations is a high probability event, and will repeatedly hover from the nearest low of 90,000 to the highest point of 106,000. The possibility of a sharp decline is limited, and the ETH price lacking stabilizers is lacking. Instead, there is a possibility of further downward trend.

But altcoins are not so lucky. According to data, the existing altcoins supply is obviously oversupply. The total number of cryptocurrency tokens listed on CoinMarketCap has reached the 11 million mark, while there are currently more than 36 million altcoins. In contrast, less than 3,000 types of altcoins in 2018 were compared with In 2013, the data was very different. Considering today's market funds, the structural dislocation of the supply and demand market is obvious.

On the other hand, Trump's own operations also poured a basin of cold water on the altcoins. Their own money issuance and leeks have destroyed the radiation effect of the industry originally believed to be a counterfeit bull market, resulting in a further contraction of liquidity of altcoins. PVP becomes synonymous with the industry under the existing liquidity. From this point of view, except for large-scale capital endorsements or altcoins in speculation, the negative trend of other altcoins will continue in the short term, and even Trump has fallen to $16. If you want to return to the counterfeit bull market, you may have to wait. A period when the macro environment is more relaxed.

Against this background, macro indicators still need to be paid attention to, and this week is a key week for indicator release. On February 11 and 12, the United States will announce its 1-year and 3-year inflation expectations in January. Powell will also submit a twice-year monetary policy report to the US Congress. The January CPI, core CPI, and PPI will also be This Thursday is announced.

Careful risk aversion may be the best market operation at present.