Original article by Odaily Odaily( @OdailyChina )
Author｜Wenser ( @wenser2010 )
Upon waking up, the crypto market once again experienced a "Monday-style flash crash".
After BTC briefly rose above $97,000 last week, its weekly chart ultimately closed above $95,000. Just as the market was anticipating a recovery in the overall crypto market driven by BTC, a long-awaited "significant pullback" struck again—within a few hours, BTC briefly fell below $92,000, currently trading around $92,750; ETH briefly fell below $3,200, currently trading around $3,213; and SOL quickly fell below $140, currently trading around $133. Coinglass data shows that $593 million in positions were liquidated in the past four hours, with long positions accounting for a staggering $566 million; the number of people liquidated in the past 24 hours reached 238,400.
The main trigger for this "Black Monday" may still be Trump's series of questionable actions.
The race for the new Federal Reserve Chair has taken a dramatic turn: "Dovish" Hassett may be out of the running, while "hawkish" Kevin Warsh's chances of winning have surged.
As the "heart of the American economy," the Federal Reserve has always played the role of "the hand of God" in the American and even the world economic system through its monetary privileges, independent status, and detached attitude. The selection of the chairman of the Federal Reserve is the most crucial figure behind this "hand of God." With the current chairman, Powell, about to leave office, the nomination of the new chairman is of paramount importance and is therefore regarded as a "market barometer."
Previously, White House economic advisor Kevin Hassett was considered a leading candidate due to his pro-Trump stance and dovish support for interest rate cuts. However, Trump has not given a clear answer. Recently, the shortlist for the new Federal Reserve Chair has narrowed down to four candidates: Federal Reserve Governor Christopher Waller, former Governor Kevin Warsh, BlackRock executive Rick Rieder, and Hassett. Recommended reading: "Federal Reserve 'Change of Leadership' Countdown: 5 Candidates Revealed, Who Will Be the Ultimate Winner?"
Latest news indicates that Hassett may be out of the running, while Kevin Warsh's chances of winning have surged. White House economic advisor Kevin Hassett stated that Trump is likely to keep him in his current position, which would disqualify him from the race for the next Federal Reserve Chairman. Trump expressed reservations last week about nominating Hassett to succeed current Fed Chairman Powell. At a White House event, he told the National Economic Council director, "To be honest, I actually hope you stay in your current position." Hassett also commented on the White House last Sunday, saying, "There are many excellent candidates, and the president is likely to make the right decision and think that this is the best place for me right now." He expressed "flattery and gratitude" for Trump's comments about his future, calling the president "a really good person." Recommended reading: "The 'Strict Principal' of BTC is Coming? If He Heads the Fed, the Crypto Boom May Come to an Abrupt End."
Following Trump's speech, traders on the prediction market website Kalshi raised the probability of Warsh getting the job to 60%, while Hassett and Waller's probabilities were only 16% and 14%, respectively. Traders on Polymarket expressed similar sentiments, with Warsh at 60%, Hassett at 15%, and Waller at 13%. Previously, Warsh and Hassett were evenly matched.
Jerome Powell's term as Federal Reserve Chairman will end on May 15. The selection process is being led by Treasury Secretary Bessant. Intriguingly, last night, Treasury Secretary Bessant stated , "Trump is committed to ensuring the independence of the Federal Reserve. We have four excellent candidates for Federal Reserve Chairman. I believe the Senate will be satisfied with the election of any of these four candidates."
Previously, Trump stated that he would appoint Powell's successor this month, but did not provide a specific date. With Trump approaching his one-year anniversary in office, the market may not have yet developed sufficient resilience to cope with his ambivalent attitude, leading to a sharp drop in confidence in the crypto market and directly causing a market crash.
Trump's "tariff war hat trick": Greenland dispute, EU tariff war against the US
On the other hand, from the perspective of the overall global economic situation, instability is also increasing.
Greenland becomes a political focal point in Europe and the United States, with tariff disputes resurfacing.
As a major exclave of the European Union, Greenland has long been regarded as Denmark's "backyard," but now, this situation may be about to change drastically.
Last May, Trump boldly stated that he did not rule out the possibility of "taking the island by force" ; and six months later, at the beginning of this year, this bold statement was reiterated by White House Press Secretary Levitt: the purchase of Greenland is currently under discussion. Taking Greenland by force is not ruled out, and all options are being considered.
Following the "blitzkrieg at the Venezuelan presidential palace and capture of Maduro," this public statement undoubtedly sent a chill through Greenland, many EU countries, and even countries around the world.
Previously, the Trump administration considered spending money to persuade Greenlanders to secede from Denmark and "join" the United States , in exchange for a one-time payment of $10,000 to $100,000 to 57,000 Greenlanders. It must be said that in Trump's eyes, who has always acted unpredictably, politics is always driven by an "economic calculation."
Ultimately, the "Greenland crisis" escalated from a territorial dispute into a "high-tariff trade war." On January 18, Trump announced that due to the Greenland issue, the United States would impose a 10% tariff on all goods exported to the United States from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, effective February 1, with plans to raise the tariff to 25% on June 1. These tariffs would remain in effect until an agreement was reached on the "complete and total purchase of Greenland." This demonstrated his resolute attitude, a "do-or-die" approach.
As a result of this news, several EU countries are considering imposing additional tariffs on €93 billion worth of US goods exported to the EU.
Last April, a similar "tariff trade war" was first launched by Trump, and this factor remains a key factor affecting the crypto market and even the global economy.
Furthermore, Trump's move is not only a "territorial dispute" but also carries the implication of an "economic counterattack."
Trump: The EU's huge fines on US tech companies are extremely unfair
On January 15th, US President Trump stated publicly that the EU's massive fines against US tech companies were extremely unfair and discriminatory against American technological excellence and taxation. Related data shows that in 2024, the EU's total fines against US tech companies reached €3.8 billion, while the total income tax of all listed European internet technology companies in the same period was only €3.2 billion. Currently, US tech giants such as Apple, Google, and Meta are facing billions of euros in fines or back taxes from the EU. It's clear that Trump has long been dissatisfied with the EU's "high-pressure policies" regarding economic sovereignty.
Obstacles to the "Crypto-Friendly Act" could be a potential factor contributing to a market downturn: CLARITY faces a consensus crisis.
Aside from macro-level events, the obstruction of the CLARITY bill, which is closely related to the crypto market, may have also contributed to the surge in selling pressure and the price crash.
Opinion: The delay of the US Senate's cryptocurrency market structure bill has increased regulatory uncertainty, putting pressure on related assets.
Alex Thorn, head of research at Galaxy Digital, previously stated that the postponement of the Senate Banking Committee's scheduled review of the crypto market structure bill highlights deep disagreements between Congress and industry on several key issues, particularly stablecoin yield mechanisms and DeFi-related provisions.
The postponement came hours after Coinbase CEO Brian Armstrong withdrew his support for the bill. Armstrong publicly opposed the bill's wording regarding tokenized securities, DeFi restrictions, and stablecoin yields. Senate Banking Committee Chairman Tim Scott subsequently announced a postponement of the hearings, but has not yet released a new timetable. With the Senate adjourning next week, the earliest possible resumption date is between January 26th and 30th.
Alex Thorn pointed out that within just 48 hours, the draft bill was released late at night, and over 100 amendments were submitted. Stakeholders continued to discover new points of contention at the last minute, significantly increasing the difficulty of political coordination. In the market, following the announcement of the delay, crypto assets generally declined, with Bitcoin and Ethereum falling by about 2% that day; related US stocks also came under pressure, with Coinbase falling 6.5%, Robinhood falling 7.8%, and Circle falling 9.7%.
He believes that although there is a broad consensus on the "market structure" itself, a difficult-to-bridge political divide has formed around non-core but highly sensitive issues such as stablecoin yields, DeFi compliance, and granting the SEC regulatory tools in the field of tokenized securities. "The surface differences between the two sides are not large, but the actual gap is very deep."
Previously, several tokenization companies, including Securitize, Dinari, and Superstate, refuted Coinbase's opposition to the CLARITY bill. For more details, please read: "CLARITY Deliberation Suddenly Delayed: Why is There Such a Major Division in the Industry?"
Summary: The pullback may continue, and traders are taking profits.
Last weekend, trader Eugene posted on his personal channel that he had chosen to take profits temporarily due to the underperformance of his investments, and had essentially exited his long positions in Altcoin. However, he is still holding long positions in core Bitcoin and has significantly increased his cash holdings in preparation for the next round of trading.
With BTC rebounding from the $85,000 to $90,000 range to above $97,000, taking profits may be the best option, given the high-risk volatility factors such as expectations of macroeconomic interest rate cuts, the global political and economic situation, and rising prices of precious metals like gold and silver.
Therefore, the correction in the crypto market may continue in the short term, and whether it can resume its bull market trajectory, perhaps like last year, we can only hope for a "TACO-style performance" from Trump.
