Taking a look at the fall, the factors affecting bitcoin's decline are increasingly complex from different dimensions. Bitcoin's fall from $40,000 to its nadir of $32,000 is undoubtedly driven by the linkage of THE US stock market and the expectation of the Federal Reserve's monetary policy. On the day before the Fed's decision, U.S. stocks opened down, but bitcoin rebounded, petering out at $38,900, an important sign that the broader market is starting to move independently of U.S. stocks.
The United States time on January 27, 3 o 'clock, the Federal Reserve rate hike resolution meeting held as scheduled. It is clear that the interest rate will be raised in March, and the balance sheet will be shrunk after the interest rate hike, but the specific time is uncertain. As soon as the news came out, NASDAQ index and Bitcoin also recovered calm after a short fluctuation. Such a result did not exceed the market's expectation, and the uncertainty of shrinking the balance sheet surprised everyone. It only said that the shrinking of the balance sheet would begin after the interest rate hike, but did not specify the number of interest rate hikes.
From the recent data on the chain, the rebound force is accumulating, and there are more and more game forces participating in bitcoin. From the data analysis on the chain:
1. The exchange is clearly flowing out;
2. Large households are accelerating their holdings;
3. Stable currency circulation increased;
4. Negative rates;
Looking forward to the market in addition to the United States and the Fed dominated the game force, the chain data can continue to reverse, rebound.
Last year's 519 drop does not affect the general direction of the bull market, but this year's 122 drop is different. This time, as the biggest and most certain narrative cycle in the rising process, the cycle of water release started after the epidemic in 2020 has ended, which means that the market enters the chaotic period of stock game, and then looks for the next structural narrative.
2022 trend of the narrative forecast
1. The war between financial sector and the physical sector
The interest rate hike in the Western world caused the rapid collapse of the local currencies of South Africa and Turkey, and virtual currencies became the first choice of investment targets for ordinary people. But why not use stablecurrencies anchored to the U.S. dollar? This may be the source of new leeks. Physical war leads to the rise of risk aversion and the prominent advantage of bitcoin's value storage, which may be the core advantage of Bitcoin compared with stabocoin. In short, as the world becomes more unstable and volatile, cryptocurrencies will become the new anchor of value in an uncertain world.
2. Big tech companies enter crypto Native
Imagine, for example, Microsoft Blizzard releasing a cryptocurrency-based game, Walmart building a cryptocurrency-based NFT e-commerce platform, and Facebook launching a Metaverse app based on Ethereum. These tech giants will increase the number of users in the crypto world by 10 to 100 times. Equivalent to basically continue to consolidate the foundation of the whole Crypto.
The current market is cold, so it is a good investment strategy to invest in mainstream assets and value assets, including BTC and ETH, and value assets including SOL, NEAR, ATOM, AVAX, FTM, etc. The fundamentals of these innovative public chains are not greatly affected, and they will fall temporarily under the influence of the market in a short time, and the future market can be expected.
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