Let's consider a hypothesis: although the recent market downturn in the crypto space was triggered by the decline in gold and silver, the overall performance of the US stock market has actually been quite good, quickly stabilizing and demonstrating enough resilience, indicating that liquidity hasn't experienced major issues.
Therefore, we can initially attribute the complex decline in the crypto market to a temporary liquidity shortage caused by the sharp sell-off of highly liquid crypto assets following the margin increases in gold and silver. If this hypothesis holds, we might even see a wave of "Crypto Winning Lessons," meaning: Bitcoin was sold off because it was too excellent and too useful, so as the liquidity canary in the coal mine, if it dies quickly, it can also recover quickly. Once the leverage in precious metals is unwound and the margin shortfall-induced panic ends, capital pressure decreases, liquidity returns, and crypto prices rise, naturally restoring market sentiment. This coincides with the Lunar New Year in February, when Asia also needs to withdraw funds for the holiday, so liquidity contraction and increased volatility are inevitable. Therefore, there's no need to fight hard in February; since volatility is high, it's better to let go and enjoy the holiday peacefully. After the leverage unwinds post-Lunar New Year, around March, a natural recovery trend is likely to emerge. By then, waiting for the trend to clarify before re-entering is completely feasible.
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Let's consider a hypothesis: although the recent market downturn in the crypto space was triggered by the decline in gold and silver, the overall performance of the US stock market has actually been quite good, quickly stabilizing and demonstrating enough resilience, indicating that liquidity hasn't experienced major issues.
Therefore, we can initially attribute the complex decline in the crypto market to a temporary liquidity shortage caused by the sharp sell-off of highly liquid crypto assets following the margin increases in gold and silver.
If this hypothesis holds, we might even see a wave of "Crypto Winning Lessons," meaning: Bitcoin was sold off because it was too excellent and too useful, so as the liquidity canary in the coal mine, if it dies quickly, it can also recover quickly.
Once the leverage in precious metals is unwound and the margin shortfall-induced panic ends, capital pressure decreases, liquidity returns, and crypto prices rise, naturally restoring market sentiment.
This coincides with the Lunar New Year in February, when Asia also needs to withdraw funds for the holiday, so liquidity contraction and increased volatility are inevitable.
Therefore, there's no need to fight hard in February; since volatility is high, it's better to let go and enjoy the holiday peacefully.
After the leverage unwinds post-Lunar New Year, around March, a natural recovery trend is likely to emerge.
By then, waiting for the trend to clarify before re-entering is completely feasible.