Trump performed surgery on patients with a heavy hand, and after he got off the operating table, he found that head nurse Powell was unwilling to give the patients a blood transfusion.
Written by: 1912212.eth, Foresight News
In the early hours of April 7, the crypto market experienced a significant drop after several days of consolidation and fluctuation. Bitcoin fell from a high of $82,000 to a low of $77,000, while Ethereum dropped from $1,800 to around $1,500. SOL also fell to just above $100, and many altcoins saw substantial declines, with tokens like SUI/BERA/ENA/AAVE experiencing 24-hour drops exceeding 11%.
In terms of liquidation data, according to Coinglass, over 288,000 people were liquidated in the last 24 hours, with a total liquidation amount of $891 million, including $758 million from long positions. The largest single liquidation on a CEX occurred on Binance, valued at $16.38 million. On-chain, the "63,410 ETH whale" position was also liquidated due to the rapid decline, resulting in losses of up to $79.59 million.
However, some stubborn whales continued to buy the dip during Ethereum's decline. Lookonchain data shows that a whale purchased 5,227 ETH at an average price of $1,578. Additionally, the whale address 7 Siblings continued to buy ETH over the past 10 hours, spending a total of $42.66 million USDC to acquire 25,102 ETH at an average price of $1,700. They hold over 660,000 ETH (approximately $1.037 billion). They borrowed $412 million U by collateralizing ETH from multiple lending protocols. These lending positions are currently considered healthy, with liquidation prices below $1,100.
The market is in turmoil, and just as market sentiment was recovering from neutral, the fear index has turned back to extreme fear. What happened?
Tariff Clouds Over US Stocks
Tariff clouds are looming over the global market, and US stock futures opened with a sharp decline on Monday, while the fear index futures surged.
US stock futures narrowed their losses, with S&P 500 futures currently down less than 3%, having previously dropped 5.4%; Nasdaq 100 futures are now down less than 4%, after a drop of 6.2%. The fear index VIX futures soared by 34.4%. US Treasury yields rose, with the 10-year US Treasury yield down 10 basis points; in after-hours trading, Apple fell 5.5%, Tesla dropped 10%, and Nvidia fell 9%; the Nikkei 225 index and the Topix index both fell over 5%. Previously, the Nikkei 225 index and Topix futures were suspended after hitting their lower limits; spot gold returned to above $3,040 per ounce, after briefly touching $2,971.28. Earlier, spot gold fell below the $3,000 mark, hitting a low of $2,988.61 per ounce.
On Sunday, senior economic officials from Trump dismissed investors' concerns about inflation and recession, insisting that despite global tariffs causing market turmoil, prosperity is on the horizon. Officials, including Treasury Secretary Bessent and Commerce Secretary Lutnick, stated that Trump would stick to the tariff agenda, with Lutnick indicating that tariffs are imminent, and Bessent asserting that there is no reason to factor in an economic recession into pricing.
Trump suggested that the stock market might need to "take medicine."
Goldman Sachs' latest report shows that it has lowered its forecast for US GDP growth in the fourth quarter of 2025 to 0.5% and raised the probability of a recession over the next 12 months from 35% to 45%. This is due to a sharp tightening of financial conditions, foreign consumer boycotts, and a continued rise in policy uncertainty, which could suppress capital expenditure, potentially exceeding previous assumptions.
The crypto market is now closely linked to the macro market, especially the US stock market. When a crisis occurs in the macro market, risk assets with strong liquidity often follow suit in market fluctuations.
Uncertainty Over Interest Rate Cuts
As recession fears rise, market expectations for interest rate cuts by the Federal Reserve have increased, with bets being placed on five rate cuts this year. US federal funds futures suggest that the Fed will cut rates by 120 basis points this year. Strategists at JPMorgan, led by Jay Barry, expect the Fed to decide on rate cuts at every FOMC monetary policy meeting until January 2026, predicting that the upper end of the federal funds rate target range will drop to 3.0% by early next year.
On April 4, Trump called on Powell, stating that now is the best time to cut rates. However, Fed Chair Powell stated in a speech that "weak economic growth and rising inflation will offset each other, leading the Fed to maintain its expectation of two rate cuts in 2025." The Fed has not predicted the probability of a recession, but external forecasting agencies have raised that possibility. The tariff levels are higher than almost all forecasters expected, but it remains unclear where they will ultimately land. Recently, progress toward achieving the 2% inflation target has slowed, and the Fed is prepared to wait for clearer signals before considering adjustments to its policy stance. It is still too early to say what the appropriate path for monetary policy is. There will be significant fiscal legislation and regulatory changes, and many businesses have indicated that they are waiting for clear guidance to make decisions.
In response, some have humorously commented, "Trump says he is performing surgery on patients with a heavy hand, and then he got off the operating table to find that head nurse Powell is unwilling to give the patients a blood transfusion."
According to CME's "FedWatch" data, the probability of a 25 basis point rate cut in May is 33.3%, while the probability of maintaining the current rate is 66.7%.
The Fed's reluctance to cut rates has also led to extremely pessimistic market sentiment, with increasing selling pressure.
What’s Next for the Market
After the decline in the crypto market, market sentiment is extremely pessimistic; however, so far, BTC has not fallen below the March 11 low of $76,606.
Top trader Eugene Ng Ah Sio posted on his personal channel that this decline is not only in the cryptocurrency market but also represents unprecedented turmoil in the entire stock market. He vaguely feels that as long as the response is appropriate, once this storm passes, it may create wealth capable of changing destinies. But for now, survival is key.
Arthur Hayes posted on social media that a significant portion of Trump's supporters do not hold substantial financial assets. There is a strong sense of schadenfreude between non-shareholders and shareholders—this is precisely why Trump dares to take a hard line on tariffs, as he is confident that his core supporters will back him. Additionally, he stated that if the bond volatility index breaks 140, it will force the Fed to "open the floodgates."
Since the Meme craze has cooled, the valuations of mainstream altcoins have significantly decreased. During this violent market correction, investors have generally felt the pain, and perhaps after the Fed begins to cut rates, some truly valuable project protocols will gain the favor of a rational market.
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