Recently, the economic data released by the United States exceeded market expectations, showing strong economic growth momentum. At the same time, concerns about inflation rebound have heated up again, directly leading to a surge in U.S. bond yields. This series of changes not only makes the Fed's monetary policy outlook more complicated, but also brings significant pressure to the risk asset market. Both U.S. technology stocks and cryptocurrency markets have fallen sharply.
Analysts at StarEx Exchange believe that the strong data has dampened market expectations for the Fed to cut interest rates as soon as possible. Previously, the market generally expected the Fed to cut interest rates twice in 2025, but this expectation was quickly lowered after the recent economic data was released. Some analysis agencies even believe that the Fed may not cut interest rates throughout this year, and even if it does, the rate will be very limited.
Since cryptocurrencies are considered high-risk assets, their prices are often closely related to market liquidity and investor risk appetite. Strong economic data has made investors worry that interest rates will remain high for a long time, leading to further tightening of liquidity and significant pressure on risky assets, causing the cryptocurrency market to suffer a heavy blow.
Along with the economic data, the market was shaken by the resurgence of U.S. Treasury yields. The rise in U.S. Treasury yields has dealt a double blow to the cryptocurrency market. On the one hand, higher bond yields have attracted a large number of investors to turn to traditional financial assets, leading to a further reduction in the liquidity of the crypto market. On the other hand, the rise in U.S. Treasury yields has also strengthened the attractiveness of the U.S. dollar, making crypto assets less attractive in the global market.
This round of decline has had a more severe impact on altcoins. As a bellwether of the crypto market, Bitcoin has fallen under the influence of macroeconomic negatives, but the long-term trend may still rebound driven by economic performance. However, the situation in the altcoin market is more complicated. There are a large number of altcoins in the current market, with high market capitalization but lagging ecological development, which makes these assets particularly weak in market adjustments. Many altcoins are projects incubated by venture capital institutions, and their market capitalizations have expanded rapidly in the early days, but with the arrival of the lifting of the ban, institutions have cashed out a lot, exacerbating market volatility. StarEx exchange analysts believe that for most altcoins, their price trends may continue to show a "rebound and then fall back" pattern, lacking the momentum for long-term trend increases.
Although the overall crypto market is under pressure, the primary market is clearly starting to heat up. Data shows that the trading volume of decentralized exchanges (DEX) has accounted for more than 20% of the overall market trading volume and hit a record high. Behind this trend is the rapid progress of technology and ecology. Since the outbreak of meme coins on the Solana chain, decentralized wallets and related tools have achieved great development. Nowadays, even hot meme coins can be hyped up to a market value of billions of dollars through DEX, and a bull market on the chain is taking shape.
StarEx exchange analysts believe that the strong performance of US economic data has a negative impact on the crypto market in the short term, mainly reflected in the weakening of the Fed's expectations of rate cuts and the rise in US bond yields. However, this fluctuation also once again highlights the market's divergence trend: mainstream assets such as Bitcoin may still rebound, while the trend of altcoins may be more complicated and weak. At the same time, the development of decentralized finance is injecting new vitality into the market. The rise of DEX and the promotion of DeFi applications provide more opportunities for investors.
In 2025, when uncertainty and opportunities coexist, the core driving factor of the crypto market will still be the performance of the US economy. We need to pay close attention to macroeconomic data and policy trends. The advent of the BTC and on-chain bull market has great potential.
