A week ago, stocks of companies including NVIDIA and AMD in the U.S. stock market began to decline in the overnight session due to DeepSeek-induced expectations of potentially reduced future demand for the artificial intelligence (AI) chip supply chain. Bitcoin, which has been closely following the trend of U.S. stocks recently, was also dragged down by this decline.

Further Decline Amid Tariff Announcements

Early this morning during the Asian trading session and the U.S. overnight session, Bitcoin continued its downward trend after a slight decline over the weekend. Perhaps influenced by the U.S. government's announcement on Saturday of imposing a 25% tariff on imports from Mexico and Canada and a 10% tariff on imports from China, Bitcoin fell close to $91,000 around 10:00 AM Hong Kong time.

Crypto Market Experiences Another "Black Monday"

While Bitcoin's decline this morning was not significant, most altcoins, including Ethereum, experienced cliff-like drops. Ethereum saw a maximum decline of about 40% in the past three days, falling to near $2,100 this morning. Numerous altcoins hit new lows since the bear market in 2022.

Turbulent Derivatives Market

According to Coinglass data, calculated from the lowest point at noon today, the liquidation amount in the crypto derivatives market exceeded $2 billion within 24 hours, affecting over 700,000 traders. This figure even surpassed the liquidation funds caused by market panic after the Bank of Japan unexpectedly raised interest rates last year, setting at least a two-year high for 24-hour liquidation amounts.

Market Capitalization Plummets

Excluding the top ten cryptocurrencies by market capitalization, the combined market capitalization of other cryptocurrencies fell to near $220 billion this morning, reaching levels last seen from August to October of last year, according to TradingView statistics.

"Final Drop" or "Start of Bear Market"?

In last Monday's analysis article, the author pointed out that after multiple unsuccessful attempts to break through the 106,000to107,000 range, we had reason to beware of short-term correction risks. Bitcoin quickly rebounded after falling near 98,000lastMondayandonceagainapproachedthe106,000 level, leading many investors to anticipate the annual "Chinese New Year red envelope rally."

However, just as Bitcoin rebounded to $70,000 in late July and early August last year before quickly falling back, multiple failed attempts to break through a certain high point can often lead to rapid declines.

Midweek last week, the Federal Reserve announced that it would maintain its current interest rates and removed the statement about making sustained progress in reducing inflation from its announcement, leading the market to expect that the Fed may not cut interest rates in the first half of the year. Upon the release of this news, risk asset markets rose instead of falling. This, to some extent, provides a good explanation for Monday's decline:

Many investors were puzzled by the sharp decline triggered by DeepSeek's emergence on Monday, believing that DeepSeek actually allows companies to use less computing power to train models, thereby contributing to the promotion and development of AI. In the long run, this is beneficial to NVIDIA's chip designers. However, capital markets are often not afraid of certain bad news but are more afraid of uncertain news. This was also one of the reasons for Bitcoin's quick recovery from its decline last week. The brief decline was due to uncertainty, while the subsequent reversal was more like "even bad news is predictable."

High Uncertainty in Market Outlook

However, this time, the author wants to remind that the subsequent policy path of the Federal Reserve and Donald Trump's radical strategies and their impact on the global economy have entered a state of great uncertainty. Originally, Trump's team announced that Trump would not initiate the process of raising tariffs in the early days of his term, but now the fact is that this strategy is expected to be implemented much earlier, and the impact of increased tariffs on the U.S. economy remains unknown, making the Federal Reserve's next moves unpredictable.

The unpredictability of two events that could potentially determine the direction of capital markets has made the market extremely fragile, and any subsequent disturbances may trigger market fluctuations beyond expectations. While the author still believes it is too early to conclusively determine whether the market is in a bull or bear trend, risk factors are rapidly accumulating in the short term. Even if numerous policies supporting the development of Web3 are proposed in the coming period and even if multiple U.S. states support government investment in Bitcoin in the short term, they may still not offset the impact of macroeconomic uncertainties.

Crypto Market Experiences Another "Black Monday" (Repeated for Emphasis)

Whether it's the gap-down opening of S&P 500 Index futures in Hong Kong this morning, the gap-up opening of the U.S. Dollar Index, or the recent record highs in gold prices, they all indicate that a significant amount of funds are seeking safe havens. While Crypto can bring excess returns, the flip side is huge losses that many people cannot bear. The author advises that in a market environment with excessively high uncertainty, it is best to observe more and act less.

A week ago, stocks of companies including NVIDIA and AMD in the U.S. stock market began to decline in the overnight session due to DeepSeek-induced expectations of potentially reduced future demand for the artificial intelligence (AI) chip supply chain. Bitcoin, which has been closely following the trend of U.S. stocks recently, was also dragged down by this decline.

Further Decline Amid Tariff Announcements

Early this morning during the Asian trading session and the U.S. overnight session, Bitcoin continued its downward trend after a slight decline over the weekend. Perhaps influenced by the U.S. government's announcement on Saturday of imposing a 25% tariff on imports from Mexico and Canada and a 10% tariff on imports from China, Bitcoin fell close to $91,000 around 10:00 AM Hong Kong time.

Crypto Market Experiences Another "Black Monday"

While Bitcoin's decline this morning was not significant, most altcoins, including Ethereum, experienced cliff-like drops. Ethereum saw a maximum decline of about 40% in the past three days, falling to near $2,100 this morning. Numerous altcoins hit new lows since the bear market in 2022.

Turbulent Derivatives Market

According to Coinglass data, calculated from the lowest point at noon today, the liquidation amount in the crypto derivatives market exceeded $2 billion within 24 hours, affecting over 700,000 traders. This figure even surpassed the liquidation funds caused by market panic after the Bank of Japan unexpectedly raised interest rates last year, setting at least a two-year high for 24-hour liquidation amounts.

Market Capitalization Plummets

Excluding the top ten cryptocurrencies by market capitalization, the combined market capitalization of other cryptocurrencies fell to near $220 billion this morning, reaching levels last seen from August to October of last year, according to TradingView statistics.

"Final Drop" or "Start of Bear Market"?

In last Monday's analysis article, the author pointed out that after multiple unsuccessful attempts to break through the 106,000to107,000 range, we had reason to beware of short-term correction risks. Bitcoin quickly rebounded after falling near 98,000lastMondayandonceagainapproachedthe106,000 level, leading many investors to anticipate the annual "Chinese New Year red envelope rally."

However, just as Bitcoin rebounded to $70,000 in late July and early August last year before quickly falling back, multiple failed attempts to break through a certain high point can often lead to rapid declines.

Midweek last week, the Federal Reserve announced that it would maintain its current interest rates and removed the statement about making sustained progress in reducing inflation from its announcement, leading the market to expect that the Fed may not cut interest rates in the first half of the year. Upon the release of this news, risk asset markets rose instead of falling. This, to some extent, provides a good explanation for Monday's decline:

Many investors were puzzled by the sharp decline triggered by DeepSeek's emergence on Monday, believing that DeepSeek actually allows companies to use less computing power to train models, thereby contributing to the promotion and development of AI. In the long run, this is beneficial to NVIDIA's chip designers. However, capital markets are often not afraid of certain bad news but are more afraid of uncertain news. This was also one of the reasons for Bitcoin's quick recovery from its decline last week. The brief decline was due to uncertainty, while the subsequent reversal was more like "even bad news is predictable."

High Uncertainty in Market Outlook

However, this time, the author wants to remind that the subsequent policy path of the Federal Reserve and Donald Trump's radical strategies and their impact on the global economy have entered a state of great uncertainty. Originally, Trump's team announced that Trump would not initiate the process of raising tariffs in the early days of his term, but now the fact is that this strategy is expected to be implemented much earlier, and the impact of increased tariffs on the U.S. economy remains unknown, making the Federal Reserve's next moves unpredictable.

The unpredictability of two events that could potentially determine the direction of capital markets has made the market extremely fragile, and any subsequent disturbances may trigger market fluctuations beyond expectations. While the author still believes it is too early to conclusively determine whether the market is in a bull or bear trend, risk factors are rapidly accumulating in the short term. Even if numerous policies supporting the development of Web3 are proposed in the coming period and even if multiple U.S. states support government investment in Bitcoin in the short term, they may still not offset the impact of macroeconomic uncertainties.

Crypto Market Experiences Another "Black Monday" (Repeated for Emphasis)

Whether it's the gap-down opening of S&P 500 Index futures in Hong Kong this morning, the gap-up opening of the U.S. Dollar Index, or the recent record highs in gold prices, they all indicate that a significant amount of funds are seeking safe havens. While Crypto can bring excess returns, the flip side is huge losses that many people cannot bear. The author advises that in a market environment with excessively high uncertainty, it is best to observe more and act less.