Original | Odaily Planet Daily (@OdailyChina)
Author | Azuma (@azuma_eth)
Just a day after the "Crypto Patriarch" Trump loudly "shilled" to establish a strategic Altcoin reserve (see《Crypto Market V-Shaped Reversal: The "Trump Effect" Strikes Again》), the Altcoin market has suddenly changed direction, with the market plummeting overnight, catching everyone off guard with the pace of the bull/bear flip.
OKX market data shows that BTC once fell below 83,000 USDT (lowest to 82,600 USDT), giving back all the gains after Trump's "shilling". As of around 10:00 (same below), it is temporarily reported at 83,333.9 USDT, with a 24-hour drop of 10.43%.
The Altcoin market is even more disastrous.
The two major Altcoin leaders ETH and SOL both fell more than 10%, with ETH falling below 2,100 USDT, temporarily reported at 2,025.83 USDT, with a 24-hour drop of 16.28%; SOL fell below 140 USDT, temporarily reported at 136.3 USDT, with a 24-hour drop of 21.05%.
XRP and ADA, which were "pointed out" by Trump yesterday, also performed poorly, with XRP temporarily reported at 2.28 USDT, a 24-hour drop of 18.7%; ADA temporarily reported at 0.78 USDT, a 24-hour drop of 27.55%.
The situation of other Altcoins is not worth mentioning, as maintaining a drop within 20% is now considered "excellent" performance, and most coins have generally fallen below the low point of the previous day's plunge.
Alternative data shows that the Fear & Greed Index has fallen from 33 to 15 today, returning to the "Extreme Fear" zone.
In terms of derivatives data, Coinglass data shows that 1.002 billion US dollars were liquidated across the network in the past 24 hours, the vast majority of which were long positions, amounting to 868 million US dollars. In terms of currencies, 369 million US dollars of BTC were liquidated, and 194 million US dollars of ETH were liquidated.
Analysis of the Reasons for the Plunge
Regarding the reasons for the plunge, there are various opinions in the market, but they can be roughly divided into three categories.
"Difficulty in Implementing Strategic Reserves" Theory
Currently, many institutions/big shots attribute the plunge to the "difficulty of establishing a strategic Altcoin reserve", with some people warning of the risk of a short-term further decline even during yesterday's surge.
The recent "short seller" Arthur Hayes commented on the "strategic Altcoin reserve" yesterday, saying: "There's nothing new here, just talk. Let's wait until the crypto working group gets congressional approval to borrow money or revalue gold prices. Without that, they have no money to buy Bitcoin and Altcoins."
Andrew Tu, Head of Sales at market maker Efficient Frontier, also said that the details of the strategic Altcoin reserve plan are still unknown, including how much the US government will actually purchase and how it will fund the purchases.
Aurelie Barthere, Chief Research Analyst at Nansen, also warned yesterday that the surge may only be temporary, as establishing a US Altcoin reserve requires a lengthy approval process.
"Tariff Policy" Theory
In addition to the "strategic reserve" discussion, some professionals have also attributed the decline to Trump's tariff policy.
Yesterday, Trump announced that he would impose a 25% tariff on goods from Mexico and Canada on Tuesday, raising concerns about a North American trade war, causing turmoil in the financial markets and affecting the Altcoin market as well.
It is worth mentioning that the White House had previously previewed that "Trump will issue a statement on investment" last night, causing the Altcoin market to be restless, but what finally came was Trump announcing "tariffs on imported agricultural products starting April 2"... The disappointment of this expectation also dampened the market's positive sentiment to some extent.
"Correlation with US Stocks" Theory
As the process of Altcoin mainstream adoption progresses, the correlation between the market and US stocks is becoming stronger and stronger. Yesterday, the Dow Jones fell 1.48%, the Nasdaq fell 2.64%, and the S&P 500 fell 1.76%; in the tech giants, Nvidia fell sharply by 8.69%, Amazon fell more than 3%, and Tesla, Google, and Microsoft all fell more than 2%, against this backdrop, BTC could hardly be spared.
The aforementioned Andrew Tu said yesterday that if the stock market also falls, it may lead to another decline in Altcoin prices.
Bitfinex also stated in its latest report that broader macroeconomic conditions (including the performance of the S&P 500 index) will severely impact Bitcoin's trend in the coming weeks, and the market remains fragile, and the sustained bullish momentum may be difficult to achieve without new institutional capital inflows.
How Will the Market Develop in the Future?
Honestly, in this volatile "monkey market" where technical analysis is no match for a single person's "shilling", the difficulty index of forecasting the future market is rising sharply, and the persuasiveness of various theories is also fading.
Some people's recent forecasting track record is quite good, such as Arthur Hayes, who has been consistently bearish to $70,000 and still insisted on shorting even in yesterday's brief frenzy, and he released another long article this morning predicting the future market (the full text will be translated and released later), with the core content as follows:
I firmly believe that we are still in a bull market cycle, so the worst bottom will be the historical high of the previous cycle at $70,000. I'm not sure if we'll drop that low. A positive signal for US dollar liquidity is that the US Treasury General Account is declining, which is providing liquidity.
If this round of rally is just a "dead cat bounce", I expect Bitcoin to fall back to around the low $80,000s, giving us another opportunity to enter. If the S&P 500 or Nasdaq 100 index falls 20% to 30% from the historical high, coupled with the imminent bankruptcy of a major financial institution, we may experience a synchronized global market adjustment. In that case, all risk assets will be sold off together, and Bitcoin may fall below $80,000 again, or even correct to $70,000.
Regardless of how the market changes, we will cautiously buy on dips, not use leverage, and patiently wait for the final violent fluctuations in the fiat financial markets. When the global economy recovers under the leadership of the US, Bitcoin is expected to break through $1 million or even higher."
However, given the current situation, it seems that following some kind of predictive theory is not as good as closely following that "insider whale" who has "50x longed" and then "quickly shorted" (address: 0xe4d31c2541A9cE596419879B1A46Ffc7cD202c62), who has accurately "predicted" the violent fluctuations in the market in both directions over the past two days, and it is hard to believe that there is no other story behind this.
The market is getting tougher, please operate cautiously, keep your ammunition, and restrain your leverage, as only those who remain at the table have a chance to laugh in the end.
