jakiro
Source: Coin Market Trader
In the past month, we have always believed that 88,000 is the bottom of this round of adjustment, mainly based on two reasons.First, since MSTR released its $42 billion increase plan, 88,000 is the lowest average price of seven buys, and has become a key support for the continued operation of the MSTR long flywheel.Secondly, among the Bitcoin ETF put options that expired on January 17, the holdings of put options below 88,000 have always accounted for less than 20%, indicating that the main short sellers have no intention of suppressing the market in large quantities.Therefore, we always believe that this round of adjustment is a short trap for Trump to “reverse and pick up people” before taking office, and this view has now been verified!
Although market trading volume is still sluggish, local speculative enthusiasm in the market is still rising under the impetus of Trump’s new cryptocurrency policy.On January 18, the Meme coin TRUMP issued by the Trump family on Solana soared from US$0.18 to US$95, an increase of 52,700%, setting a myth of a 6-hour 100-fold increase.According to on-chain data, about 476 addresses achieved a hundred times profit during the TRUMP pull-up process.There is an unknown giant whale address that bought 5.97 million TRUMP for 90 seconds after TRUMP was launched, 90 years later, with a cost of only US$0.18 each, and its current floating profit exceeds US$400 million.With the popularity of TRUMP transactions, the volume of DEX transactions on the SOL chain has surged sharply, and the SOL chain, which is known for its high performance, has also experienced congestion, and the price of SOL has risen accordingly.
From the perspective of trading, Trump’s new crypto-encryption policy actually brought two positive signals: 1. The funds that are most risk-oriented in the market are still actively looking for new trading main lines, and currencies with strong narrative logic can still be obtainedExtremely high valuation premium.2. The US president’s personal outcome may greatly lower the compliance threshold for personal issuance of coins. At the same time, Trump’s wealth-making effect will also set off a trend of celebrities’ issuance of coins, which will bring new growth to the market.As White House crypto director David Sacks said, the unfriendly rule against cryptocurrencies has ended, and a new era of U.S. cryptocurrency innovation has just begun.Therefore, for a long time, no matter how the market fluctuates, the market will not lack trading opportunities.At the same time, under the guidance of TRUMP’s strong money-making effect, Trump-related topics have become the most certain trading direction in the short term.
At present, there are three clear directions for Trump’s trading: one is the token combination held by the WLFI protocol initiated by the Trump family, including ETH, AAVE, LINK, ONDO and ENA; the other is to provide Trump’s campaign with the provisions of the Trump campaign.Funded and resource-backed projects led by political allies, such as DOGE and XRP; third is the Meme coins issued by Trump and his family, including TRUMP and MELANIA.Among them, the first main line is more like the long-term layout of the Trump family, because it not only has a complete compliance foundation, but also has a considerable potential increase.
On January 19, the Trump family reduced their holdings of TRUMP worth $46 million in the name of market making, and increased their holdings of ETH through WLFI.Affected by the popularity of TRUMP, WLFI subscription volume has surged, and the first round of 20% of token supply has been sold out.Due to strong market demand, the project decided to issue an additional 5% token supply, which means that WLFI’s sales on January 19 have exceeded three times that of the past three months.As long as the Trump family continues to implement the strategy of “air coins” for value coins, it is only a matter of time before the WLFI token portfolio rises.
However, under the existing market structure, Trump’s main line also means that the liquidity of the market is siphonized.From January 19 to 20, with the surge in TRUMP and MELANIA, old altcoins and AI Meme crashed one after another, and the situation of tight liquidity in the market undoubtedly emerged.According to past experience, the rise in trading congestion is usually accompanied by the increase in stock positions. Once market sentiment peaks and there is a lack of new incremental funds entering the market, the market often experiences a cliff-like decline.Therefore, when Trump’s theme is in decline, the market may experience severe fluctuations.
On the macro level, since December 1, 2024, U.S. Treasury yields have continued to rise and exceeded the federal funds rate, causing great concern in the market.According to past experience, the continued upward trend of risk-free interest rates often has a significant crowding-out effect on the liquidity of risky assets, which is also the main reason for the recent continuous sharp drop in altcoins and small-cap U.S. stocks.However, as the US inflation warming momentum eased in December, U.S. Treasury yields fell from highs, and altcoins also rebounded strongly, causing market expectations for a “copy season” to rise sharply.It is worth noting that although the 10-year U.S. Treasury bond interest rates have weakened their constraints on risky assets, their yields are still at a high level in the past five years, and their inhibitory effect on speculative sentiment is still obvious.
If the interest rate on 10-year U.S. Treasury bonds cannot return to below 4.3% again (the level at the time of Trump’s trading start), it will be difficult for altcoins to have a large-scale market.Therefore, the current operation strategy of altcoins is still to focus on trading opportunities.In addition, as the US Treasury yield rose from 3.67% to 4.76%, the global M2 scale also dropped from 108T to 104.5T.Historically, the fluctuation direction of Bitcoin and global M2 is roughly the same.If M2 cannot stop the decline and stabilize, Bit will also be under further pressure.
In the stock market, funds always break through in the direction of least resistance, and following the trend is the best strategy to avoid making mistakes.Therefore, under the current market conditions, investors have no better choice except to participate in the Trump-themed game.For investors with low risk appetite, following the WLFI portfolio is also a good idea.As for whether other altcoins have any chances to make up for the rise, it will depend on whether there is room for improvement in macro liquidity.
