Brothers, today let's talk about the recent situation. Old Trump's approval rating has collapsed again, dropping from 40% to 36%, setting a new low since returning to the White House. It's worth noting that when he took office last year, it was at 47%. Now this data really slaps him in the face.
Why has it collapsed so badly? To put it simply, there are two main issues: oil prices and war. As soon as fighting broke out in the Middle East, oil prices skyrocketed, and the common people's wallets have been hit hard. Can they not complain? Polls show that only 25% of people approve of his handling of the cost of living. More critically, a staggering 61% of Americans oppose his military actions against Iran. The person who initially called to end "stupid wars" is now stuck in one himself; the audience isn’t buying it.
Success or failure hinges on Trump, this statement is absolutely true. He was able to rise to power initially based on his economic card and anti-establishment persona. Now, his economic management satisfaction rate has dropped to 29%, lower than at any time during the tenure of his long-time opponent Biden. Support for his foreign policy has hit a new low. In this battle, domestic livelihoods have been neglected, and internationally, it's chaos.
The most critical issue is that this chaotic situation has directly put the Federal Reserve on the hot seat. Before the outbreak of the conflict, the market was still hoping for two or three rate cuts this year to give it some breathing room. And now? Futures traders have pushed the interest rate cut expectations to December 2027, and some even believe there is a 30% chance of a rate hike this year. Why? Because when oil prices rise, inflation pressures follow. Federal Reserve Chairman Powell has clearly stated that he will not consider rate cuts until he sees improvement in inflation. This is equivalent to throwing a bucket of cold water on the market.
What does this mean for us in the crypto space?
The high interest rate environment will last longer. Money has become 'more expensive,' and those high-risk assets (including some altcoins) supported by low-cost funding will face greater pressure. Market liquidity expectations are tightening.
The safe-haven logic has temporarily failed. In the past, whenever there was turmoil, everyone thought of buying gold or Bitcoin for safety. But this time, as you can see, gold prices have been falling continuously, and Bitcoin is also experiencing violent fluctuations. Why? Because the market is now more afraid of 'stagflation' — the economy is struggling while inflation remains high. In such times, holding non-yielding assets (gold, Bitcoin) carries a high opportunity cost, which may lead to their liquidation for liquidity.
Volatility will become the norm. Geopolitics, central bank policies, inflation data... any slight movement will be amplified. Last week, gold prices hit the largest weekly decline in over 40 years, illustrating just how extreme market sentiment is. In this environment, high leverage is suicide; one must control their hands.
My personal opinion:
The recent plunge in Trump's support rate appears to be a political crisis on the surface, but it deeply reflects the tearing of global macro logic. On one side, geopolitical conflicts are driving up physical inflation, forcing central banks to hesitate in easing; on the other side, high interest rates suppress economic activity and risk assets. The market swings repeatedly between these two factors, creating a bizarre situation where 'safe-haven assets are not safe, and risk assets are all risky.'
For the cryptocurrency market, risks certainly outweigh opportunities in the short term. Don't listen to the hype of 'digital gold'; in the face of absolute interest rates and a strong dollar, Bitcoin's safe-haven attributes are insufficient. Currently, funds are seeking certainty and returns, or simply holding cash and observing. Next, closely monitor two points: first, whether the Middle East situation will have substantial alleviation (for example, if a real agreement can be reached), and second, whether U.S. economic data will deteriorate rapidly, forcing the Federal Reserve to reconsider easing.
In short, when the stage is unstable, it doesn't matter how hard the performers sing. Right now, this macro stage is shaking violently, and the best strategy for us retail investors is to: reduce positions, watch more and act less, keep some dry powder, and wait for the storm to settle or for the next narrative to become clear before entering the scene again. Don't become a casualty of Trump's political show.
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