The crypto market is in a state of drastic turmoil. In February, Bitcoin plummeted 17.39%, the worst performance in February since 2014 and the second worst February in history. As March begins, the market remains weak, and Bitcoin has fallen below multiple key support levels one after another, basically returning to the level when Trump won the election last year. Since hitting a record high on December 16, 2024, the total market value of the crypto market has dropped by more than 30%, and trading volume has dropped by nearly 60%. The interweaving of short-term positives and macro risks is triggering widespread panic in the market.

The short-term positive news has been shown all the benefits. There are no substantial benefits visible to the naked eye in the current market, and market confidence has been severely set. The highly anticipated strategic Bitcoin reserve plan was finalized last week, but the reserve only obtained Bitcoin through the confiscation process, rather than directly using fiscal funds to purchase it. This means that the market has not ushered in new buying momentum, but has further compressed the market's imagination of "sexual benefits of the United States", which has disappointed the market.

In addition, the first cryptocurrency summit held by the White House last Friday failed to bring something substantial. It was reported that no specific documents were released throughout the event and no clear guarantee or timetable was provided for direct purchase of new cryptocurrencies. Most of the speeches were just thanks to Trump and praise for his "wise and powerful", and there was no positive for the market.

Compared with the market fanaticism and grand imagination space when Trump was elected, the short-term driving force of the currency circle has almost disappeared, and even the imagination space is lacking.

Macro uncertainty suppresses risky assets

External macro uncertainty is adding variables to the market. While Trump's capricious tariffs have hit the market one after another, they are also strengthening the market's expectations for slowing economic growth and rising inflation.

As Trump introduces a series of tariffs, prices of all kinds of goods, from food to clothing, are expected to rise, which will test the resilience of consumers and the overall economy. Goldman Sachs Group's model shows that the risk of recession is rising, rising to 23% from 14% in January. A similar model from JPMorgan also shows that the market's implicit recession probability has climbed to 31% from 17% at the end of November.

The market is becoming increasingly tired of uncertainty, and risky assets continue to decline. The tech stock rout has forced investors to speed up slashing their exposure to cryptocurrency. According to coinglass data, since March, how many Bitcoin spot ETFs have beenThere are net outflows every day, with a total net outflow of more than US$1.35 billion.

CPI cooled down, but the data may be the only good news for the recent major macroeconomic data, which was released last night, that the US February CPI was lower than expected across the board. This urgently needed report in the market has eased anxiety about the US economy being trapped in the quagmire of stagflation. The strong rebound in technology stocks led the Nasdaq to rise by more than 1.2%, and Bitcoin also rebounded by 2%. But it should be noted that Trump's tariffs have not yet fully penetrated into the CPI.

The tariff stick waving by Trump is mainly on the head at present - 20% tariffs were imposed on all goods (10% was imposed on February 4, and 10% was imposed again on March 4), and the tariffs on Canada and Mexico are still in a threat stage and have not yet been implemented.

Generally, it takes an average of 25-35 days to ship to the United States. Most of the current sales of US retailers are in stock without tariffs. Newly purchased tax-raising goods are expected to enter terminal sales from March to April. Therefore, if the market only focuses on February data, it may be too early to think that the "worst moment has passed". Therefore, after the release of CPI data last night, the Dow Jones Industrial Average's three consecutive declines and the limited S&P's gains reflected this cautious sentiment in the market. If Trump's tariffs continue to expand and more tariff wars break out, the subsequent CPI is likely to face greater impact.

It is still unclear whether the market has entered a bear market. But in the short term, the current crypto market has not only lost endogenous catalysts such as "ETF capital inflows" and "sexual benefits", but is also exposed to the double hit of the expansion and escalation of tariff wars and the risk of stagflation in the US economy. Markets dominated by risk aversion are extremely fragile, and short-term sustained bullish momentum may be difficult to achieve unless driven by critical adjustments or favorable economic conditions.

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