The market environment is chaotic, and I don't know where to start. First, in the cryptocurrency market, the price of BTC plummeted last week to $78,000, and according to Coinglass, over $3 billion in long futures positions were liquidated. BTC is set to post its worst monthly performance since June 2022, and ETFs also saw their largest monthly outflow on record (a $25 billion outflow just last week).

With the price crash, market sentiment has deteriorated significantly. Last Friday, Alternative's "Fear & Greed" index fell to an extreme low, and then the Trump administration intervened, bringing two major positive news: announcing a "Cryptocurrency Summit" at the White House this week, and proposing to include 5 tokens (BTC, ETH, SOL, XRP, ADA) in a new strategic reserve.

Encouraged by this, prices rebounded sharply, with BTC price rising directly. However, it encountered resistance around $92,000-$93,000, which corresponds to the long-term trend line resistance level. If the government is learning from the Fed how to "manipulate" the asset market - or rather, "verbally guide" the market trend - so far, their timing and technical control have been impeccable. Does this mean we are witnessing the formation of a "Trump Put" in the cryptocurrency market?

However, the news of the "strategic reserve" has not been endorsed by all market participants. Long-term supporters and opinion leaders of decentralization (such as Naval Ravikant) do not support it, and the discussion and controversy over the composition of the reserve assets are likely to continue to ferment in the coming period. If the Democratic Party, in order to oppose the Trump administration, ultimately chooses to embrace BTC and become BTC extremists, that would be a rather ironic scenario.

Our intuitive judgment is that this rebound may only be a corrective rebound within the trend, as the structural forces at the recent top still exist (memecoin FUD sentiment, the impact of trading account losses, excessive market leverage, and the overall risk-averse sentiment in the asset market), not to mention the legislative process for establishing a cryptocurrency strategic reserve is still long and uncertain.

It should be emphasized that the US President has no power (or funds) to directly purchase cryptocurrency assets, and the relevant measures still need to be approved by Congress and follow the legislative process, and before taking any substantive action, funds need to be obtained through the issuance of debt by the Treasury Department.

Although we are positive about the long-term development direction of the market narrative, we must also remind that the market should not hold overly optimistic expectations for short-term progress, and in the foreseeable future, cryptocurrency prices will still be closely related to the risk appetite/risk aversion sentiment of the macro market.

Turning to the macro market, although the stock market rebounded at the close last Friday, the stocks most affected by Trump's policies have fallen about 80% from their post-election highs, and his uncertain stance on tariffs and DOGE spending cuts has also begun to negatively impact market sentiment.

Although US stocks rebounded (+1%) last Friday in an oversold situation, causing the February trend to be slightly narrowed, the overall macro market sentiment has clearly become more negative, with most economic surprise indices turning negative.

The most noteworthy is that the Atlanta Fed's first-quarter GDP growth forecast saw a record decline last week, from +2.2% to -1.3%, mainly due to a sharp weakening in exports (from -$29 billion to -$250 billion) and consumer spending (from +2.2% to +1.3%).

Consumer credit and housing market data have continued to decline sharply, further exacerbating expectations of weak economic growth, with new home sales hitting a historic low and new home starts beginning to decline after the post-pandemic boom.

At the same time, Treasury Secretary Bessent seems unconcerned about the current economic slowdown, attributing the economic pressure to "Bidenflation" and the policies of the previous administration. More interestingly, he explicitly stated that it will be the "true Trump economy" "6-12 months from now", suggesting that the government is not in a hurry to address the current economic downturn, and also implies that the "Trump Put" in the stock market may not take effect until a year from now.

If the "Trump Put" in the cryptocurrency market is currently only verbal, and the "Trump Put" in the stock market will not take effect until next year, then where is the real "Trump Put"? We believe that the macro (and cryptocurrency) community has overlooked the core key - the real "Trump Put" has been playing a role in the fixed income market all along.

The following is a summary of several observations over the past month:

• Bond yields have fallen significantly, with expectations for the first rate cut this year brought forward from year-end to early summer.
• The core PCE has quietly declined, reaching its lowest level since March 2021 (3.096%).
• Elon Musk has explicitly stated that the bond market should thank the government for the DOGE spending cuts.
• In a recent X conference call, Elon Musk said:

"If you're short bonds, I think you're on the wrong side."

• Treasury Secretary Bessent said in a public interview with Bloomberg TV:

"We are not focused on whether the Fed will cut rates...After the Fed's large-scale rate cuts, the 10-year bond yield actually rose, causing the market to question whether monetary policy can effectively impact the overall economy."

• Bessent further emphasized:

"The President wants to see lower interest rates...In our discussions, our main focus is on the 10-year bond yield."

"The President has not asked the Fed to cut rates, he believes that as long as we relax regulations on the economy, push through tax reform bills, and lower energy costs, interest rates and the dollar will adjust on their own."

It is clear that the Trump administration has a deep understanding of the workings of the financial markets and is aware of how the decline in long-term interest rates can benefit the economy. In fact, focusing on long-term interest rates rather than overnight rates is no different from the logic of the Fed's QE (quantitative easing) or Operation Twist, just with different expressions.

That is to say, the current strategy of the Trump administration is clearly to suppress long-term interest rates, so that the benefits of lower financing costs can naturally spill over to the dollar, stock market, and cryptocurrency market. Therefore, we believe that the real "Trump Put" in the market is currently in the bond market, not the stock market, and investors can adjust their investment strategies accordingly. (Disclaimer: Please do your own research, this is not investment advice.)

The focus of the market this week will be on whether the United States will impose a 25% tariff on Mexico and Canada as scheduled, followed by the European Central Bank meeting and the non-farm payroll report on Friday. After the violent fluctuations last week, risk assets may take a breather, and the market may maintain a volatile and consolidating pattern in the near term, with limited upside potential.

Wishing you all successful trading!