The crypto market is in turmoil, is the bull run coming to an end?

During the Spring Festival, the crypto market suffered a heavy blow, triggering heated discussions within the industry about whether the bull run has come to an end. Despite some positive news recently, market sentiment remains weak, and price fluctuations are severe.

Currently, the main focus of the crypto market is on two aspects: the Federal Reserve's monetary policy and the new government's encryption policy. The Federal Reserve's cautious attitude is understandable, especially against the backdrop of increasing global risk aversion. The latest economic data shows that the U.S. labor market remains stable, but inflation expectations have risen. The market generally expects that the Federal Reserve may start cutting interest rates in June or July of this year.

After the new government took office, there has been a noticeable shift in attitude towards the encryption industry. Some regulatory agencies that previously opposed encryption are adjusting their stance. The Securities and Exchange Commission (SEC) is reducing the size of its encryption enforcement division and has received multiple applications related to cryptocurrency ETFs. The Federal Deposit Insurance Corporation (FDIC) is also reassessing its regulatory approach to encryption activities, providing a compliance path for banks to engage in crypto business.

The White House Digital Asset Working Group is studying the feasibility of Bitcoin reserves, and several states have also launched Bitcoin strategic reserve plans. These initiatives are expected to support the price of Bitcoin. However, despite the continuous favorable policies, the market performance has been disappointing, especially in the altcoin market.

Institutional investors continue to buy. According to data, both Bitcoin and Ethereum spot ETFs have recently shown a net inflow. In the long term, institutions seem to maintain confidence in the crypto market.

In the short term, Bitcoin may fluctuate within the range of $90,000 to $106,000, with limited potential for a significant decline. Ethereum, due to a lack of stabilizing factors, may face further downward pressure on its price. The altcoin market is facing an oversupply issue, and aside from a few projects supported by large capital or popular themes, other altcoins may continue to face pressure.

In the current market environment, investors should closely monitor the upcoming economic indicators, including inflation expectations, CPI, and PPI data. Cautious hedging may be the wisest market strategy at the moment.