The crypto market is sluggish, but institutions are still positioning for the future.

After the Spring Festival, the crypto market seems to have fallen into a chill. Originally, there were hopes that Trump's inauguration would bring positive news for the encryption industry, but the tariff policy on February 3 has impacted the global financial market.

Against this backdrop, the crypto market has suffered a heavy blow. Bitcoin prices have plummeted significantly, with Ethereum experiencing a decline of as much as 25%. Tokens ranked in the top 200 by market capitalization generally fell. It is estimated that around $8-10 billion was liquidated that day, with over 720,000 people facing liquidations.

Although positive news has frequently appeared since then and mainstream cryptocurrencies have shown some signs of recovery, market sentiment remains weak and price volatility has intensified. Altcoins are performing poorly, and even the previously popular AI sector has lost its vitality.

The main points of contention in the current market are concentrated on the Federal Reserve's monetary policy and Trump's encryption policy.

The Federal Reserve maintained a cautious stance, postponing interest rate cuts at the end of January, and the non-farm payroll data released in February also showed that the labor market remains healthy. The rise in consumer inflation expectations has further raised market concerns. These factors caused Bitcoin to temporarily fall to around $96,000, while Ethereum hovered around $2,700.

From a macro perspective, the tariff policy of the Trump administration may push up inflation. It is also reasonable for the Federal Reserve to adopt a wait-and-see attitude in response to external uncertainties. Currently, the market widely expects the Federal Reserve to start cutting interest rates as early as June or July.

However, the Trump administration's attitude towards the encryption industry is becoming more friendly. Regulatory agencies like the SEC are easing their hardline stance and are reassessing their regulatory approach to crypto-related activities. This creates conditions for cryptocurrencies to integrate into the traditional financial system.

The White House is also actively studying topics such as Bitcoin reserves. Several states have begun to promote Bitcoin strategic reserve plans, which will bring new incremental funds to the crypto market.

Despite the frequent positive news, the market performance is still unsatisfactory. Investor sentiment is weak, with risk aversion dominating. Bitcoin's price is temporarily hovering in the range of $93,000 to $98,000, while Ethereum faces greater downward pressure.

Institutional investors continue to buy in. According to data, Bitcoin and Ethereum spot ETFs have both seen net inflows over the past week. This indicates that institutions remain optimistic about the long-term prospects of crypto assets.

In contrast, the altcoin market is more sluggish. The number of existing altcoins has exceeded 36 million, and there is a clear structural mismatch in supply and demand. Except for a few projects supported by large capital, altcoins are unlikely to see improvement in the short term.

In the current environment, investors need to closely monitor the upcoming inflation data and other macro indicators. Cautious hedging may be the best market strategy at the moment.