My analysis comes down to two main points: the “false recession” and the “real narrative.”
A “false recession” refers to a situation where the market shows signs of decline, panic, and “recession” signals, but these are not the result of fundamental changes in the market’s structure. Instead, they are typically triggered by external factors or short-term emotional swings, not by a deterioration of macroeconomic fundamentals or industry trends.
The recent Bitcoin dip, while closely linked to Trump’s tariffs and other external pressures, does not signal a fundamental shift in the cryptocurrency market. Bitcoin’s decentralized nature and its role as a store of value have not been shaken. Additionally, the increasing attention from central banks and continued investment in blockchain technology from global powers like China, Europe, and the US indicate that the global recognition of cryptocurrencies remains strong. Even if risk-averse sentiment causes short-term capital outflows, many investors still believe in the long-term potential of Bitcoin. Therefore, the current downturn is likely just an overreaction to short-term emotions and doesn’t overshadow the overall healthy development of Bitcoin’s market.
Looking at the true market narrative, we see Bitcoin and other cryptocurrencies increasingly playing a significant role as emerging financial assets globally. Major traditional financial institutions like PayPal and Square have entered the space, with more institutional investors incorporating cryptocurrencies into their portfolios. Additionally, the application of blockchain technology in industries like DeFi and NFTs is expanding, creating new growth opportunities in the crypto market.
More importantly, the regulatory environment for cryptocurrencies across major economies is steadily improving. The gradual stabilization and transparency of these policies help alleviate long-term holders’ concerns, boosting market confidence. While short-term volatility may still occur, it does not signal the end of Bitcoin’s uptrend.
Looking at the overall market sentiment, we haven’t seen widespread panic selling. While Bitcoin’s drop has been substantial, the market hasn’t been gripped by mass fear, and large-scale capital withdrawal hasn’t occurred. In fact, some long-term holders are buying at these lower levels, suggesting that the market isn’t facing a fundamental issue.
Based on the current market structure, the bearish sentiment may be amplified in the short term, but it won’t deliver a fatal blow to the long-term trend. This temporary correction presents an opportunity for those looking to enter the market, especially with major assets like Bitcoin, where investors still have confidence in the long-term potential.
So, even though short-term declines may have triggered some panic, the true market narrative indicates that this correction is likely just part of the bear trap. A rebound may follow, offering higher returns for investors who stay calm and strategic.
Moreover, on January 13, 2025, I specifically discussed Goldman Sachs’ correction probability, warning of a sharp pullback around this time.
In conclusion, I view the current market dip as more of a bear trap than the end of Bitcoin’s bull run. That’s why I’ve purchased $4,000 worth of Bitcoin in two separate transactions on Drift.
Drift is a decentralized exchange on Solana, and I believe it is currently the best decentralized platform. Although it doesn’t support all coins, its margin leverage is superior to that of centralized exchanges. Just to give you a sense of its advantages: On centralized exchanges, you need a deposit to earn interest, but with Drift, interest starts accruing the moment your funds are in the account. Here’s a beginner’s guide to Drift.
Getting Back to the Point: Why I Bought $4000 Worth of Bitcoin Instead of More
The reason I only bought $4000 worth of Bitcoin instead of more is simple: even if I’m wrong, it won’t matter. If the price continues to drop, I won’t be at risk of liquidation. Of course, my judgment may not be correct, and there’s a 50% chance I’m wrong. If you’re a newcomer to the crypto space, you might want to use the following more cautious approach.
