Sometimes it feels like I’m writing into the void, but that’s fine. Putting my thoughts down helps me process market data, reflect on my positions, and assess whether I’m on the right track. I don’t claim to be an expert—just someone who has studied the markets as best as I can.
Right now, we’re in the midst of multiple tariff wars, with Trump using tariffs as a strategic tool to push his agenda, likely aiming to pressure Powell into cutting rates. The problem is, consumer sentiment has declined, meaning spending is slowing, yet company costs are still being passed on to consumers. This suggests inflation could spike down the line.
So where is capital rotating? US equities have been selling off, while European markets have seen strong inflows. It makes sense—Europe experienced its own recession earlier, and the lagging effects of US market conditions may still be playing out. Meanwhile, Warren Buffett has stockpiled around $325 billion in cash. As the saying goes, “Follow the smart money.” Whether Buffett’s team acted too early or is bracing for something significant, they’re clearly prepared to deploy capital at the right moment.
Another factor I’m watching is the yen carry trade. If Japan hikes rates even once or twice, it could trigger a major shake-up in borrowed funds, becoming the next catalyst for volatility. While there are many macro events at play, these stand out as the most significant right now.
Bitcoin and Crypto Outlook
Bitcoin recently corrected from its all-time high of $109K down to $76K before rebounding to around $84K, mirroring a minor recovery in the S&P 500. Given ongoing geopolitical tensions, this price level isn’t bad. However, the latest FOMC meeting wasn’t encouraging—we saw downward revisions in GDP growth forecasts and a reduction in expected rate cuts from three to two in 2025. The only silver lining was the slowdown of quantitative tightening, signaling a potential shift towards silent quantitative easing (QE).
Some may argue that QE isn’t in play yet, but markets are forward-looking. By the time QE is officially announced, it will already be priced in, often triggering a classic “buy the rumor, sell the news” reaction. My current focus is on timing the absolute market bottom—one of the hardest things to do as an investor. But after catching the Bitcoin bottom in 2022, I know the effort is worth it.
Traders around me are generally bullish for Q2, but I’m cautious about April 2. Trump could escalate tariffs on the EU, accelerating a stock market downturn. With China, Canada, and Mexico already in the mix, the EU seems like the next logical target.
Market Strategy and Bias
Right now, my attention is on equities rather than crypto. Liquidity is drying up, retail traders are either bag-holding or have capitulated, and many are looking for a true bottom. No one wants to hold the wrong crypto for the next 2-3 years, which is why I’ve positioned mostly in Bitcoin and stablecoins. Altcoins have performed decently but haven’t delivered the same gains as last cycle. There are growing concerns about some altcoins, including Ethereum, potentially losing relevance.
Is this the local bottom? I don’t know. But I’ll be ready to trade when we reach a full capitulation moment. Markets move in behavioral cycles—euphoria, greed, caution, fear—and I intend to do the opposite. This simple contrarian approach has worked for me since 2021, and I’m applying it again this cycle.
Signs of a Market Bottom
For me to shift my bias to bullish, I’d want to see:
- Full capitulation of Bitcoin and crypto from retail traders
- Warren Buffett deploying his cash reserves into the market
- A complete Fed pivot on interest rates
- The unfortunate onset of QE
- Trade deal negotiations similar to 2019-2020 (US-China phase one deal)
- Ceasefires in major global conflicts
- Corporate earnings reversing, with valuations returning to fair value
- New market narratives emerging
- M2 money supply expansion
Without these catalysts, my bias remains bearish. In the near term, I expect the DXY (US Dollar Index) to strengthen, along with USD and stablecoins. Bonds should see inflows as equities decline, while capital rotates into US and BRICS currencies. I’m keeping a close eye on Bitcoin’s potential downside to $50K–$60K in an extreme scenario, but my immediate focus is on the $68K–$72K range. Hopefully, we may see a market reversal before this downturn spirals into full-blown recession territory.
Disclaimer: If you’re reading this, none of this post is financial or investment advice. It’s purely for entertainment and speculative purposes. You should do your own research, as investing and trading are highly risky. I use various data points to support my thesis. Any charts shown are publicly accessible and provide only an overview of Bitcoin and the broader market.