Yesterday, the US released CPI data for January that exceeded almost all analysts' expectations, and inflationary pressure intensified. The Federal Reserve also stated that it was not in a hurry to cut interest rates. After the data was released, according to CME's "Fed Watch", the probability of the Federal Reserve cutting interest rates by 25 basis points in March was only 2.5 % . Barclays analysts still expect the Federal Reserve to cut interest rates once this year. They said in a client report, "The current risk is that the Federal Reserve will not cut interest rates this year. To a certain extent, we attach more importance to the non-baseline scenario where interest rate hikes enter the discussion.
This is a big negative, but after a brief decline, the market recovered the losses and performed very strongly. Analysts at the Star Ex Exchange believe that after a sharp drop in early February , panic has been released, the market is currently in a state of volatility, and will not fall sharply in the short term . High-quality currencies can be entered at low prices.
The " Spring Festival market " in 2025 did not come as expected, but instead ushered in a round of altcoin crashes. A large number of altcoins were released after being listed at high prices, and institutions cashed out one after another, causing the market liquidity to be continuously extracted, becoming the main root cause of the altcoin bear market. Analysts at the StarEx exchange believe that unless a new large-scale ecological narrative emerges, the downturn in altcoins may continue for quite a long time.
At present, the global capital market is still most concerned about the macro trend of the US dollar. In the traditional financial market, there has always been a view that if the United States wants to maintain its financial hegemony, it must maintain the strong position of the US dollar, and a strong dollar often means weaker gold. However, despite the high interest rate policy maintained by the Federal Reserve in recent years, the price of gold has repeatedly hit new highs, approaching the historical high of $ 3,000 per ounce, and the increase in the past year has been close to 50% , which shows that the market is taking practical actions to look down on the US dollar, and capital has ignored the strong policy of the Federal Reserve.
The Fed will not give in easily . The more pessimistic the market is about the dollar, the less willing or dare the Fed is to cut interest rates sharply. In early August 2024 , the market expected a rate hike for the yen and a sharp rate cut for the dollar, which led to violent fluctuations in the capital market. This also shows that the Fed's current tough stance is not only due to strong employment data and high inflationary pressure, but also out of consideration for maintaining the status of the dollar . It hopes to maintain a strong dollar as much as possible to weaken other major economies.
Today, the US dollar is burdened with huge debts. If interest rates are cut too quickly, it may cause the market to lose confidence in it and lead to a large outflow of capital. Therefore, the Federal Reserve chooses to continue to maintain high interest rates and support the strong position of the US dollar by borrowing. In contrast, Trump tends to cut interest rates, implement the " America First " policy, and reduce interference in global affairs . He appointed Musk as the " Minister of Efficiency " and carried out drastic reforms. At the same time, he vigorously promoted the development of Bitcoin as the "Plan B" of the US dollar. However, the Federal Reserve is obviously unwilling to shake the global hegemony of the US dollar and still chooses to maintain a strong US dollar at high interest rates . This policy difference continues to intensify.
Analysts at the StarEx exchange predict that the Fed will maintain a tough stance in 2025. Faced with an uncertain macro environment, institutional funds continue to pour into assets such as gold, high-quality company equity, and Bitcoin. Perhaps only a sudden " black swan event " can completely break the current situation. Before that, the market will continue to maintain a volatile pattern.
Since the beginning of the year, there have been several notable changes in the market:
In 2024, the total trading volume of centralized exchanges ( CEX ) reached 18.83 trillion US dollars, an increase of 134% from 8.05 trillion US dollars in 2023 , but still lower than the peak of 25.21 trillion US dollars in 2021. Altcoins are in a bear market as a whole, and trading activity has declined, but meme coins are extremely FOMO (panic chasing). These meme coins are mainly active in decentralized exchanges ( DEX ) on the chain, which also means that the primary market will continue to develop rapidly in the future, and more big opportunities may be born here.
Solana ecosystem trading heat has cooled down . Recently, the trading volume of Pump.fun tokens on the Solana chain has dropped significantly. The average daily trading volume in the past week was only US$ 560 million, a new low since Christmas 2024. Compared with the highest daily volume of US$ 3.13 billion three weeks ago, the trading volume has dropped sharply by 82% . After Trump and his wife issued meme coins, the liquidity of meme coins on SOL showed signs of collapse, which indicates that the heat of the meme coin market may weaken in 2025 .
After the sharp drop in early February, the inflow of funds into Bitcoin ETFs was poor, and there was even a continuous outflow of funds. In addition, the funding rate and market lending rate of perpetual contracts have dropped significantly, indicating that at the current price, institutional funds are also difficult to drive Bitcoin to rise further.
Analysts at StarEx Exchange believe that the overall landscape of the crypto market will still be full of uncertainty in 2025. The bear market of altcoins is difficult to reverse in the short term, the game of US dollar policy is still ongoing, and the differences between the Federal Reserve and Trump may further affect the global financial market. Before the arrival of a negative event of the black swan level , the market may continue to " keep playing music and dancing " .
