February 2 Market Analysis
Overnight, the global market panicked completely, with cryptocurrencies, gold, and silver all plummeting. It seemed sudden, but the core issue was the hawkish statement from Federal Reserve Chair nominee Kevin Walsh, making everyone feel that the money in the market would decrease. Various funds hurriedly escaped, which led to this collective drop.
$BTC The crypto market fell particularly hard, with Bitcoin directly breaking the key level of $75,000, and Ethereum also dropping to around $2,200. By the end of the day, the total liquidation across the network reached 500 million, with over 400,000 investors' positions being completely wiped out. The situation for gold and silver was even more ridiculous; having just set a historical high, they suddenly plummeted. Both markets weakened together, a direct reaction to the funding "tightening." Walsh is known for being hawkish, and his statement of "first tapering before cutting rates" shattered everyone’s illusions about loose monetary policies. Naturally, those asset bubbles built solely on funding were the first to burst.
Ultimately, the previous bull market in cryptocurrencies was merely a leveraged frenzy during easy money times; it looked hot but was actually very fragile. The surge in gold and silver was also a hedge against a weaker dollar. Walsh’s statement boosted the dollar, causing the market's risk appetite to cool instantly. Those who had leveraged in the crypto market were the first to falter, leading to a chain of sell-offs as big players and institutions rushed to hedge and exit. Gold and silver, losing their appeal due to the stronger dollar, saw profit-taking concentrated in a flash crash. Additionally, with the tense situation in the Middle East, their high volatility made them the first targets for capital withdrawal.
This is not the end of the market, but the conclusion of the era of easy wins. In the past, one could make money by blindly betting; that was a special situation of loose funding. Now that the liquidity bonus has faded, the market will return to rationality. Assets without actual value will eventually be eliminated. In the future, earning money will depend on vision and risk management. The upcoming hearing for Walsh is crucial; with the current trend unclear, the most reliable approach is to avoid full positions, control exposure, wait for signals, and maintain a risk floor to survive, in order to seize the next opportunity.
Now is suitable for short-term longs
Entry Points
$BTC 76000-76400 Stop Loss 75800
$ETH 2200-2230 Stop Loss 2180
