Crypto Market Faces Potential Bottom After August-Like Shakeout, Possible Long Entry on Monday

I see the current market movement as a smaller replica of August last year's crash, which reached its bottom on Monday. The August 2024 crash was initially triggered by the Bank of Japan's interest rate hike, which started the famous carry trade collapse. This was followed by a 'hawkish' statement from the Federal Reserve and a disastrous employment report, fueling fears of recession and sparking widespread discussion around the Sahm rule. The present situation appears similar, albeit without the carry trade factor. We’ve seen a slight hawkish signal from the Fed, confirmed by minor movements in short-term rates and the forex market. Additionally, there was buzz around corporate earnings—Microsoft and Meta posted strong results, Apple’s were average, and Amazon's report was met with a sharp negative reaction. Inflation data (PCE) also showed some volatility. On Thursday, aggressive profit-taking entered the stock market, turning the chart into a bull trap. Today’s dismal employment report compounded the market’s decline. Trump’s furious reaction and firing of the BLS head over unfavorable data resembles Argentina’s chaos but is mostly noisy for the markets. Similarly, Trump’s ongoing negative comments about Powell are likely just noise for now. What truly intensified the sell-off was the news of the US deploying two nuclear submarines near Russia and Trump’s statement about readiness for nuclear war, leading to liquidations among highly leveraged traders and creating a local bottom for Bitcoin after market close. Regarding the crypto market drivers, it was a very eventful week. Coinbase’s poor earnings, fears about Strategy potentially shutting down its ATM program to protect assets but limit Bitcoin purchases, concerns over the resilience of ETH Digital Asset Treasury Companies, and the launch of SEC’s "Project Crypto" aimed at modernizing securities regulations and moving markets on-chain—all presented bearish reasons. Despite these issues, the main driver this week was macroeconomics, with crypto mostly moving in tandem with stock indices. The most critical aspect is the price level itself. I believe crypto has either already bottomed after today’s close, considering the significant final sell-off, or will hit bottom along with stocks on Monday. I see this as a replay of last August’s crash—a tough shakeout. I plan to increase long positions on Monday, preferably before the US market opens, especially if a panic session occurs overnight, as long as the plan proceeds smoothly.