Author: arndxt, Crypto KOL
Compiled by: Felix, PANews
This year's "January Barometer" research is surprisingly accurate, indicating that the market is about to reverse. The risk/reward ratio appears unbalanced: a pullback after the FOMC meeting is highly likely.
It is advisable to lock in profits before the final wave of increases.
Image source: Rambo Jackson
Since last December, the open contracts of altcoins have surpassed Bitcoin for the first time, and this has occurred twice before, both times accompanied by local peaks.
Perhaps only 1% of participants can feel real excitement. For others, the winners will be those who hold assets that can maintain attention even when liquidity is low.
Liquidity is selective, the macro environment is unfavorable, and fiat currencies are depreciating. Despite the adverse environment, assets are still rising.
The biggest cyclical difference: 2021 was a liquidity-driven cycle. Low credit costs, ample liquidity, and risk assets were "smooth sailing."
2025 is different. High interest rates and tight liquidity. However, from Bitcoin to gold, risk assets are slowly rising.
High interest rates and credit tightening, yet assets like Bitcoin and gold are still climbing. The driving factor is the depreciation of fiat currency: investors are hedging against cash depreciation.
This changes the market's rhythm, with a comprehensive risk-on rally giving way to selective inflows into quality and risk-resistant assets. The game has shifted from chasing everything to timing, patience, and discipline.
What is the reason? Because fiat currency itself is weakening. Investors are not only seeking growth but also means to resist cash depreciation.
- 2021: Growth driven by liquidity expansion → Risk assets perform outstandingly.
- 2025: Growth driven by fiat currency depreciation → Hard assets and quality assets perform strongly.
This makes the game more challenging: you cannot rely on "ubiquitous money." But it also creates more favorable opportunities for those who adapt to the environment.
Current Liquidity Status Check
Despite positive signals (BTC dominance declining, altcoin holdings > BTC holdings, CEX token rotation), liquidity remains scarce. The influence of meme and celebrity coins has left the market with post-traumatic stress disorder (PTSD).
Image source: Jukov
Traders suffering from "PTSD" chase the next hot project, leaving almost no sustained funding for builders.
As a result, liquidity is concentrating on higher market cap assets with loyal communities that can maintain attention and capital inflow.
Federal Reserve and Bonds
The bond market has digested the downward trend. The probability of the Federal Reserve observing a 25 basis point rate cut is about 88%, while the probability of a 50 basis point cut is about 12%. The subtlety lies in:
Historically, a first 50 basis point cut = signal of economic recession, leading to a slow market drain.
A 25 basis point cut = signal of a soft landing, favorable for economic growth.
We are about to face a critical moment. According to seasonal indicators (such as the "January Barometer"), the risk of market volatility after the FOMC meeting has significantly increased.
The key points are:
- Stability over speculation.
- Patience over FOMO.
- Timing over alpha.
Market Overview from Last Week
Dogecoin ETF milestone: The DOJE ETF from REX Shares and Osprey Funds marks the birth of the first fund in the U.S. directly linked to Dogecoin. This indicates that meme coins have gained recognition in traditional markets; however, given Dogecoin's lack of utility, retail investor demand may dominate.
Cboe plans to launch continuous futures contracts for Bitcoin and Ethereum: The proposed Bitcoin and Ethereum contracts could have a duration of up to 10 years, with daily cash settlement. This could reduce roll costs, expand institutional derivatives strategies, and improve liquidity—pending regulatory approval.
Ant Group's asset tokenization: By connecting $8.4 billion in renewable energy assets with Ant Chain, Ant Group has introduced real-time production data and automatic revenue distribution. This institutional-first model highlights the role of blockchain in large-scale infrastructure financing.
Forward's Solana treasury: A $1.65 billion private equity investment led by Galaxy and Jump Crypto has made Forward Industries a significant holder of Solana. This is one of the first major institutional treasury investments outside of Bitcoin and Ethereum, potentially reshaping Solana's capital market narrative.
Related reading: Trading Moment: Central Bank Week Begins, Bitcoin Needs to Solidify $114,000 Support, Ethereum Seeks to Stabilize at $4,600
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