Family, who understands! The Federal Reserve suddenly turned 'hawkish', and the crypto circle directly exploded. Is BTC and ETH going to lie flat? I bet this wave is a 'panic benefit' that gives away money!
The freshly released December FOMC meeting minutes have completely crushed the market's expectations for easing! A group of Federal Reserve bigwigs collectively turned 'hawkish', constantly mentioning 'inflation is not dead yet' and 'current interest rates are not strong enough', directly slashing next year's rate cut expectations to less than twice. This move has left many retail investors in a panic, asking me overnight 'Should we clear out and run away'? Don't be anxious, as someone who has been watching the crypto market for 8 years, I’m here to share with you: this is not a cold winter, it's a moment for smart people to sift for gold!
Let's clarify: what exactly is the approach of this wave of 'hawkishness'?
Don't be scared by the 'possibly not cutting rates'! I went through the meeting minutes three times and the core conclusion is this: the Federal Reserve is 'squeezing the bubble', it's not really trying to crush the market. The so-called 'hawkish rate cut' (if it really happens) is essentially a 'gentle knife', not wanting inflation to rebound, but also fearing to crash the economy, so it deliberately lets out harsh words to cool market sentiment.
For our crypto market, this is indeed a short-term headwind: the US dollar index has started to rise, and crypto assets are traditionally sensitive to liquidity. But there's a key difference: the 'Powell shock' in October was a 'sudden change', while this time it's a 'pre-warning'. The market has had a buffer period; the destructive power will be greatly reduced. I bet this drop won't exceed half of the last one!
History doesn't repeat itself, but it rhymes: remember the lessons from the last 'hawkish strike'!
At the end of October this year, Powell's statement of 'no certainty about a rate cut in December' directly dropped BTC from 114,000 to 102,000, and ETH was even worse, falling 20%. Over 400 million in leveraged contracts were directly liquidated, and ETFs also experienced net outflows. But at that time I said in the community 'don't panic, this is a fake drop', and sure enough, it rebounded not long after.
Why is this time different? Last time was an 'expectation gap'; the market thought there would be easing, but it suddenly tightened. This time it's 'expectation management'; the Federal Reserve has given a pre-warning, which is equivalent to giving the market a vaccine. Moreover, the most critical point is: the 'fundamentals' of crypto assets are much stronger than in October!
BTC vs ETH: my exclusive judgment, which one is more resistant to shocks?
In this wave of macro headwinds, the scripts of the two leaders are completely different. Don't buy blindly and don't sell blindly; listen to my analysis:
Bitcoin: under pressure in the short term, but the bottom of 'digital hard currency' is still there!
The pressure is very direct: as the 'liquidity barometer' of the crypto circle, tightening expectations will certainly increase its short-term volatility. But the support is even stronger: when the market crashed in November, Bitcoin's overall network hash rate and mining difficulty set new historical highs—miners voted with real money, which is more useful than any analyst's words.
My operation suggestion: focus on the 100,000 mark! This is the area with the highest trading volume previously; as long as it holds, it's an excellent opportunity to increase positions. Even if it temporarily falls below, don't be afraid; there is strong support in the 95,000 - 98,000 range. If it drops below, it's like giving away money (I have already prepared my position, and I will buy in batches if it drops below 98,000).
Ethereum: this wave may lead to an 'independent market', and there are two reasons!
ETH is currently under the 'double buff', the macro headwind will have much less impact on it:
Regulation has finally become clear! The GENIUS stablecoin bill has been implemented, which is equivalent to giving Ethereum a 'green light' for payment and asset tokenization. Even Federal Reserve governors have publicly expressed optimism about its application, something that was unimaginable before.
The technological upgrade is too powerful! After the Pectra upgrade, transaction fees are low enough to be negligible, and network efficiency has doubled. More importantly, during the market crash, the trading volume of stablecoins on Ethereum actually hit new highs. Funds haven't run away; they're just playing 'hide and seek' on the chain, indicating that the ecological activity hasn't decreased.
My judgment: ETH's resistance to declines will be stronger than BTC, and it may even develop an independent market. As long as the on-chain stablecoin trading volume doesn't drop, just hold on; it is not just a crypto asset anymore, but a solid 'financial new infrastructure'. Its long-term logic is more diverse than BTC.
Three 'lifesaving signals', keep a close watch and don't let go!
As an old player, I never rely on gut feelings to operate. Here are three of the most practical observation indicators, more useful than any candlestick chart:
Price + on-chain dual verification: BTC looks at 100,000 support, ETH looks at stablecoin trading volume. If either one falters, just observe for now; if both hold steady, then go ahead with confidence;
Don't overlook the derivatives market: if the open interest in futures is too high, it indicates excessive leverage, and caution is needed against a crash. But if the funding rate turns significantly negative, it means panic is excessive, and a rebound is imminent (that's how I correctly predicted last time);
Follow the 'smart money': the fund flow of the US spot Bitcoin ETF is a key indicator! If there's still a net inflow under hawkish rhetoric, it indicates that institutions are secretly bottom fishing, which is the strongest confidence signal (I will also dig into this data and provide real-time updates).
The Federal Reserve's 'hawkish claws' have indeed come, but the crypto market is no longer the 'bubble that bursts with a poke'. There will definitely be short-term volatility, and it may even be a bit brutal, but for true long-term players, this is a good time for 'cleaning up the weeds'. Those air coins that rely on storytelling will be eliminated, while leaders like BTC and ETH will become stronger under pressure testing.
Remember: in the crypto market, the biggest profits are always hidden in 'when others panic, I am greedy', but the premise is that you must look in the right direction and find the right support. I have already shared my judgments and observation indicators, now it's time to focus on the market!
Leave a message telling me whether you are preparing to bottom fish, observe, or reduce positions? Follow me, tomorrow I will directly show my real position layout. If there are any turning points in the subsequent market, I will announce it in the square at the first time! The bigger the waves, the more expensive the fish, but we must first ensure that we stand at the bow of the boat, rather than being washed away by the waves~ Follow me, and you won't get lost. Next time we rebound, let's eat meat together!
