Contrarians,
This has been a wild start to 2025, as we’ve seen everything from BTC breaking past 100K, to Trump pumping and dumping the market with his XRP and Solana tweets, and now we have the great tariff scare of 2025. Here is what we’re seeing…
Bitcoin has dropped 33% from the all-time high, dragging the rest of the altcoin market with it. Many traders got excited with the rise of XRP and select others which caused them to bet the farm and get liquidated in the process. For the traders that are holding these assets and being patient, they’ve only taken paper losses. Traders that were over-leveraged got margin called and lost everything.
It is crazy to think that the last bull run we had Elon and mainstream pundits pumping the market with twitter posts, and now we have our very own president creating meme coins and throttling the market. Cleverly timing tweets about XRP and Solana (with no mention of BTC and ETH) then deliberately mentioning the latter in a post shortly after. It’s almost as if we’re in some upside down opposite world, to be honest. I mean, Trump’s wife and son have their own coins, too…it really is insanity at this point. Look at the chart below, 50% XRP pump to the upside of $3 on his tweet below… causing massive excitement for crypto, and then a 50% loss as the tariff scares expedites the pain down to $1.62. Traders have been played. This isn’t to be political or to take sides… simply the outcome of a well-played whipsaw of emotions.
The simple fact of the matter is that economists and members of Trump’s team know what the tweets will do to the market, and they know what their tariffs will do to the market. Everything in our opinion is cleverly timed to get the desired outcome from the market participants, causing them to get wrong-footed in the process. So… we need to think about this logically…
If you’ve followed us for any length of time you know that we tend to look to the Bitcoin dominance chart to give us an idea of where price can go. The 702 retracement level is an area of technical support and resistance and this is the exact level that could act as resistance if the tariffs are what we think they are… a scare to shake the market and cause further liquidations.
If we get rejected from this level this will be great for the crypto market as a whole. In turn, this could mean BTC is in a distribution pattern which could coincide with the 100K level acting as the catalyst for bringing the public into the market so the large funds can unload what they’ve been accumulating since 15K and funnel their gains into other assets creating further parabolic rallies. Coincidentally enough, this very situation also puts us at max fear in the market, usually signaling a reversal as panic traders look to minimize losses… eerily similar to the FTX collapse marking 15K as the bottom for BTC.
If there is one thing we’ve learned, it is that this market does not like to hand out free rides to laggards and will almost always make them pay for their FOMO into BTC and other alts. For now, we recognize these times are a little crazy and we’ll have to wait and see what comes from this. In previous scenarios, you’ll see the stop losses causing a massive wick leading to a short rally (fake reversal) and then one more push down to signify the bottom (which means we probably are not done with the pain yet).
Although, even if the stock market continues to fall… money will need to flow into other markets, as it will not just disappear. The question is, will crypto be one of them? We think, yes.
-EC Team