The current market situation is all smoke and mirrors on the candlestick charts. The real bottleneck comes from two major issues hanging over our heads.

First is the policy uncertainty on the US side. Regulators initially hoped to introduce a clear legislative framework for cryptocurrencies, but suddenly the Senate Banking Committee announced a delay in reviewing the relevant bills. Even more frustrating, the head of a major platform publicly complained that the draft bill is "full of problems," especially regarding DeFi user data collection. This turmoil immediately dampened market sentiment, and yesterday’s correction was a direct reflection of this revised expectation.

Second is the Federal Reserve’s purse strings. The latest CPI data shows that in December, the year-over-year increase in the US was 2.7%, with core CPI at 2.6%, both still above the Fed’s 2% target. What does this mean? It means whether the interest rate cut cycle can smoothly start in 2026 remains uncertain. High interest rates cause hot money to shrink, naturally reducing the attractiveness of risk assets like cryptocurrencies.

From the market sentiment perspective, global search interest in cryptocurrencies has fallen to its lowest point this year. The logic behind this is clear — retail investors have not yet entered in large numbers; currently, it’s mainly institutional investors entertaining themselves. Without the enthusiasm of retail investors, it’s difficult for the entire market to form a fully upward pattern. Instead, what we see are fragmented opportunities within structural trends.

In the face of this situation, a prudent strategy is to proceed cautiously first. Before regulatory expectations and macroeconomic conditions become clearer, it’s too risky to blindly double down on a single direction.