In the midst of strategizing, we decide the outcome from a thousand miles away. Hello everyone, I am Lin Chao, a global financial market observer, focusing on cryptocurrency market analysis, bringing you the most in-depth trading information analysis and technical teaching.

Last week, the United States announced unemployment and non-farm payroll data, which overall met the expectations of "neither hot nor cold economy, cautiously optimistic." As employment did not significantly deteriorate, the market believes that the pressure on the Federal Reserve to cut interest rates in January has decreased, and the "Fed's mouthpiece" also stated that this provides a reason to hold steady. Currently, the market estimates that the probability of no interest rate cut in January is as high as 95%.

But the real focus is the news of Trump taking over Venezuela. Aside from various online parodies, serious discussions have concentrated on its legitimacy and its impact on Venezuela's currency. Last week, we also discussed the implications of such actions on the U.S. and the global landscape from an investor's perspective. The U.S. military's actions are nominally aimed at combating drugs and terrorism, but the actual target is clearly oil. In the past, the U.S. has always fought for oil under the guise of "exporting freedom and democracy," but this time Trump has explicitly stated, "We want the oil." It is worth noting that Venezuela has the largest proven oil reserves in the world.

For the market, escalating geopolitical conflicts usually favor safe-haven assets or defense stocks. However, everyone should understand the logic behind this series of actions, as 2026 is Trump's midterm election year, and he must maintain a congressional advantage. Voters care most about two things: the economy and inflation. Stimulating the economy reliably involves printing money, but excessive money supply can drive up inflation, especially oil prices (the American public is extremely sensitive to gasoline prices), which can lead to a loss of votes.

Therefore, controlling oil prices becomes key. If the U.S. can control Venezuela's vast oil reserves and use them to lower global oil prices, it would open up space for large-scale money printing. Once inflationary pressures ease due to controlled oil prices, fiscal policy and the Federal Reserve could release liquidity more aggressively. At that time, the flood of liquidity would flow into risk assets, and Bitcoin, Ethereum, and many altcoins are expected to surge significantly. However, cryptocurrency trends are not solely determined by liquidity. If a bubble bursts in areas like AI in 2026, even if the Federal Reserve prints money, the market may first experience a deep correction.

In summary, Lin Chao believes that Trump's motivation to print money for electoral reasons does exist, but whether inflation can be successfully controlled remains to be seen.

On the institutional side, JPMorgan, MicroStrategy, and ARK Invest are all continuing to "call bullish," believing that the cryptocurrency sell-off is nearing its end, with Bitcoin showing signs of bottoming out. However, data shows that recent net outflows from Bitcoin and Ethereum ETFs still persist, and the conclusions drawn may be based on a relatively short data range.

If a significant positive development does occur, it would require the U.S. to start using national funds to purchase Bitcoin from 2026 onwards to advance its "Bitcoin strategic reserve" goal. Considering Trump's style and the need to rally support for the midterm elections, such radical policies are not impossible. Morgan Stanley is also entering the cryptocurrency ETF space, with a product line that includes not only Bitcoin and Ethereum but also Solana. This further confirms institutional preference for Solana. Last week, approximately $100 million in assets were moved onto Ethereum. The total amount of stablecoins across the network has slightly decreased, but there has been growth on Ethereum and BNB chains.

Lin Chao's Summary

Currently, the core narrative in the cryptocurrency space is still closely tied to the U.S. political cycle and liquidity expectations. Trump's actions in Venezuela are interpreted by many as paving the way for the midterm elections and preparing for significant liquidity injections in 2026. He also accused Federal Reserve Chairman Powell of corruption yesterday, all aimed at opening up "money printing space." Meanwhile, institutional layouts are accelerating (from ETFs to payments), and some established altcoins are recovering as their fundamentals improve. With the warming of old altcoins like SOL, XRP, and ADA, the market oscillates between fear and greed. Once market liquidity is pried open by Trump, a true bull market will indeed arrive.

Friends familiar with Lin Chao know that the purpose of my writings has always been to help everyone establish their own independent trading system through my observations of the world. From the candlestick patterns, we can also see that during a wide oscillation period, moving averages repeatedly cross, indicating significant market contention at this moment, which is also a clear bottoming signal. Personally, I believe that now is not the right time for contract trading; the wide oscillation period has not yet ended. Many people are eager to make money, hoping to find profits in the back-and-forth fluctuations, but here Lin Chao must remind everyone that when the market is in an oscillation period, it is actually a good time to supplement with spot trading. If it is contract trading, once a position is wrong and not stopped out, it may cause you to give back all your previous profits. If trading experience is insufficient and one does not know when to take profits, it is also easy to let profits ride a roller coaster.

If you are feeling lost—unable to understand technology, not knowing how to read charts, unsure when to enter the market, not knowing how to set stop losses, not understanding take profits, randomly increasing positions, getting stuck while trying to catch the bottom, unable to hold onto profits, missing out on market opportunities… these are common issues for retail investors. Lin Chao can help you establish the correct trading mindset. A single profitable trade is worth more than a thousand words; finding the right direction is better than repeatedly facing defeat. Instead of frequent operations, it is better to strike accurately, making each trade more valuable.

The success of investment depends not only on choosing good targets but also on when to buy and sell. Preserving capital and making good asset allocations are essential for steady progress in the ocean of investment. Life is like a long river flowing into the sea; what determines victory or defeat is never just the gains and losses of a single pass or moment, but rather a well-thought-out strategy and knowing when to stop to gain.

The global market is ever-changing, and the world is a whole. Follow Lin Chao to gain a top-tier global financial perspective.

This article is merely a personal opinion and does not constitute any trading advice. The cryptocurrency market carries risks; invest with caution!

For real-time consultation, feel free to follow the public account: Lin Chao on Cryptocurrency.

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