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Daily market interpretation, I am digital currency analyst Yi Hai Lun Coin!
BTC fell to around $74,500 on Monday and then quickly rebounded to a high of $81,000. The CME gap formed over the weekend has not yet been completely filled. The current price has returned to the peak of the last bull market, which is also the strongest support level at this stage. For the upcoming trend, both bulls and bears are evenly matched, and the market is waiting for the next stage of bull and bear to restart. Due to Trump's tariffs about to officially take effect, the 365-day moving average has once again been breached. Technically speaking, we are seeing another bear market signal in the short term. The White House has announced an additional 50% tariff on our goods, bringing the total tax rate to 104%. To counteract the associated pressures, we have signaled an increase in money supply, which also means that our fiat currency will face further depreciation pressure, benefiting exports. However, it also indicates that our trade war with the US has entered a new stage, and some regions in Europe seem to have similar plans.
Due to further impacts from tariffs, BlackRock's CEO recently pointed out that the market must be prepared for a 20% systemic correction, and BlackRock has already incorporated this risk into its strategy. He mentioned that more and more business owners are experiencing early signs of economic recession in their actual operations. The current economic situation in the US is relatively complex, facing inflation and slowing growth. Since the announcement of the tariff strategy, the volatility of the market has been severe, and the market downturn is not a sudden event, but rather a result of the long and short battle, where the bulls lost ground and the bears continued to accumulate risk. Previously, the yield on 10-year US Treasury bonds dropped to 3.9%, but it has since rebounded to 4.4%. Such fluctuations are extremely rare in history. When the market is filled with uncertainty, gold and US Treasury bonds are generally the safest choices. However, hedge funds are frantically selling US Treasury bonds, as it seems that more investors prefer to sell US Treasury bonds to avoid significant market fluctuations, thereby better protecting their assets. The market is currently worried about the simultaneous occurrence of inflation and economic recession, and news of a potential emergency rate cut by the Federal Reserve is also starting to circulate. More bets are being placed that the Federal Reserve may consecutively cut rates 4 to 5 times to mitigate macroeconomic pressures. Due to another global market collapse, the probability of rate cuts in May has risen to 55%.
Looking at the chip distribution chart, although it has returned to the previous low point, it seems to be more reasonable than before. After Trump was elected, the market rose rapidly, and there was not much trading activity in the 73,000 to 85,000 USD area. The cost basis distribution heat map in previously sparse areas is now being filled. Of course, if we want to fill the gap at $82,000, it seems we need more buying support. In the short term, with the official implementation of tariffs, the market will bear greater pressure, and we also need to be wary of short-term volatility.
According to reports, US Treasury Secretary Basant stated that the US is in substantive contact with over 50 countries to establish a more friendly tariff agreement. In his view, we are gradually becoming isolated due to our continued implementation of counter-tariff strategies. From the perspective of a reconfiguration of global trade structures, if the US successfully bypasses us and reaches agreements with other economies, we will be marginalized within the emerging multilateral system, facing unfavorable situations in long-term structural competition. Thus, macro-level uncertainties profoundly influence the expected pricing of global financial markets, especially regarding judgments about the Federal Reserve's monetary policy path. Expectations for more rate cuts this year have risen, and emergency rate cut actions by the Federal Reserve before the May meeting cannot be ruled out. The starting point of this round of price rebound is due to market rumors of a 90-day delay in tariffs, once again indicating macro-level uncertainties, especially as global trade strategies and monetary policy expectations are becoming core variables in market trends.
From the perspective of the global M2 money supply, it is currently showing a continuous expansion trend, still providing medium- to long-term support for BTC prices. From a trend perspective, BTC is still in a slow upward structure, and we will see favorable aspects before the end of this month. It was previously mentioned that there would be about a three-month lag period, but before that, it is best to see some degree of relief in tariff-related uncertainties. Secondly, from on-chain data, during a short-term low earlier this week, exchanges sold BTC at a loss, and panic selling sentiment rapidly increased in a short period. The total amount of BTC currently in an unrealized loss state has exceeded 510 coins, accounting for 25.8% of the circulating supply. Comparing the current market situation with previous bull market correction cycles, there has been about a 32% decline from the peak, and in terms of the extent of struggle and capital outflow, it does not seem to have reached extreme levels. Furthermore, looking at the MVRV ratio of short-term holders, the previous MVRV value was about 0.85, with short-term holders experiencing an average unrealized loss of about 15%. It is evident that BTC was severely undervalued when it dropped to $74,500. Regarding ETH, it reached a low of $1,400 during the recent decline. In a relatively poor liquidity environment, we have not seen a more relaxed macro environment; BTC has remained in a bull market, while the altcoin market has been very difficult. Lao Yi has reminded everyone multiple times, but some friends are still trapped because of this.
In conclusion, it can be deduced that all markets are currently experiencing adjustments and uncertainties. BTC has stagnated somewhat, but after enduring this difficult period, spot traders will welcome the dawn like Lao Yi. In the short term, BTC is still hovering above $74,000, and the market has not effectively entered a bear market phase. Considering the current overall market environment, BTC's performance is already quite good. The current stagnation of BTC also means that relief from tariffs and further easing strategies from the Federal Reserve may break this deadlock. The risk of stagflation is continually increasing; the lack of action currently also indicates that it can still hold. Once action begins, the market may not give everyone a chance to react. Facing the upcoming time point when tariffs are implemented, volatility is bound to increase. What everyone needs to do is to hedge their funds and wait for clear signals to strike again, but it also faces the arrival of opportunities. Seeking short-term trades must adopt a quick in-and-out approach, and there won't be much volatility during the day. Lao Yi will customize an offensive strategy in advance, looking for short opportunities with the big players above. The volatility is relatively large, so everyone should manage their risks accordingly. If you have any ideas, communicate with Lao Yi in advance!
Yi Hai Lun Coin: The success of investing depends not only on choosing good targets but also on when to buy and sell. Preserving principal and doing asset allocation is the key to steadily advancing in the ocean of investments. Life in this world is like a long river flowing into the sea; what determines victory or defeat is never the gains and losses of one pass or one moment but rather the confluence of countless streams!
The article is only a personal opinion and does not constitute any buying or selling advice. The cryptocurrency market has risks; investment should be cautious!
