Multiple Unfavourable Information interweaving, who is the culprit behind the big dump in the encryption market?

In the early morning, the encryption market once again embarked on a roller coaster ride, with a series of Unfavourable Information messages appearing intensively, causing Bitcoin to pull back and triggering a big dump in the entire encryption market, dissipating the gains accumulated over the past few days. This article will analyze the causes of this market fluctuation from multiple perspectives, and combined with the macroeconomic environment, explore its possible impact on future market trends.
Bitcoin falls back and all altcoins experience big dump
Under the impact of multiple Unfavourable Information, the price of Bitcoin has experienced a significant pullback. Although the price of Bitcoin still maintained around $97,000 in the early hours, mainstream altcoins have been difficult to support, all of them have undergone big dump. This phenomenon indicates that the market sentiment has become extremely pessimistic, and investor confidence has been severely hit.
Data on forced liquidation reveals market panic
According to Coinglass data, the total liquidation amount in the past 4 hours reached as high as $136 million, with long positions accounting for as much as 91.9% of the total, showing that the bullish strength in the market collapsed rapidly under the impact of Unfavourable Information. Specifically, ETH liquidation exceeded $40 million, BTC liquidation reached $25.1026 million, and DOGE and SOL liquidated $6.6247 million and $6.4043 million respectively. These data further confirm the market's panic and investors' panic selling behavior.
Potential impact of the Trump incident on the market:
The Trump sentencing process may be advanced
On January 7th local time, Judge Ellen Gesmer of the US New York Appeals Court rejected Trump's request to postpone his "gag fee" sentencing procedure. This means that Trump's sentencing may take place before he takes office as president, undoubtedly bringing great uncertainty to the market. Although Trump and his legal team have stated that they will continue to seek legal avenues to postpone or cancel the sentencing, this event has already had a significant negative impact on market sentiment.
Trump's press conference triggers global attention and response
At a press conference held at the Mar-a-Lago estate, Trump made a series of shocking statements, including calling for economic means to absorb Canada as part of the United States, and not ruling out the use of force to take over the Panama Canal and Greenland. These remarks have not only attracted global attention, but also elicited strong responses from governments of many countries. Canadian Prime Minister Trudeau, Danish Prime Minister, and Panamanian President have all strongly opposed Trump's remarks. These remarks by Trump have not only intensified the tension in the global political situation, but may also have far-reaching implications for the global economic landscape, thereby potentially exerting pressure on the encryption market.
Musk's remarks have a direct impact on the encryption market
Musk denies recent use of encryption currency in X Payments
When Musk talked about X platform payment topics on X stream, he said that there are no plans to use encryption currency in X Payments service recently. He emphasized that the company needs to obtain relevant licenses and pointed out that it is currently only focused on fiat currency and is dedicated to launching X Payments service effectively. This statement directly hit the market's optimistic expectations for the application of encryption currency in the payment field, leading to a further decline in the price of encryption currency.
The Federal Reserve's policy trends and market expectations
The probability of the Fed maintaining interest rates unchanged in January is very high.
According to CME's "Federal Reserve Watch" data, the probability of the Fed maintaining interest rates in January is 95.2%, and the probability of a 25 basis point rate cut is 4.8%. The probability of maintaining the current interest rate in March is 60.9%, the probability of a cumulative 25 basis point rate cut is 37.3%, and the probability of a cumulative 50 basis point rate cut is 1.7%. These data indicate that the Fed is unlikely to change its monetary policy stance in the short term, which will have significant implications for the global economy and financial markets.
The impact of the Federal Reserve's policy on the encryption market
The monetary policy trends of the Federal Reserve have significant impacts on global financial markets, including the encryption market. If the Federal Reserve maintains interest rates or adopts a tightening policy, it will increase borrowing costs, reduce market liquidity, and thus exert pressure on the encryption market. In addition, changes in the Federal Reserve's policy may also affect investors' risk preferences and asset allocation decisions, thereby indirectly impacting the encryption market.
Short-term market volatility will continue
Under the impact of multiple Unfavourable Information messages, the encryption market will continue to be volatile in the short term. The instability of investor sentiment and panic selling in the market may lead to further price declines. However, as market sentiment stabilizes and investor confidence recovers, the market is also expected to rebound.
The long-term development trend still has potential
Despite facing many challenges in the short term, encryption currency, as an emerging asset class and payment method, still has long-term development potential. With continuous technological advancements and gradual improvement in regulatory environment, encryption currency is expected to play a greater role in areas such as payments, finance, and blockchain. In addition, global digital transformation and widespread application of blockchain technology will provide strong support for the development of the encryption market.
Closely monitor the macroeconomic environment
The development of the encryption market is not only influenced by its own factors, but also constrained by the macroeconomic environment. Therefore, investors should closely monitor not only the encryption market, but also the global economic situation, policy trends, and geopolitical situation, etc. These macroeconomic environment changes will have a significant impact on the encryption market.
The encryption market has experienced a big dump under the impact of multiple Unfavourable Information. However, in the long run, encryption currencies still have broad prospects as an emerging asset class and means of payment. Investors should pay attention to and have confidence in long-term development trends while dealing with short-term market fluctuations.