First, let's give a class to the brothers who stayed up late. For friends who didn't stay up late, here are the key points: At 12:00 AM Beijing time on December 19, the FOMC announced that it would maintain the federal funds rate in the range of 4.25%-4.50%, which is consistent with market expectations, with no rate hike or cut. But the real 'news' is in the dot plot: the market originally expected three rate cuts in 2026, but now it has been cut to two! This change in one number reflects the Federal Reserve's attitude—don't expect me to ease up easily; as long as the tail of inflation is not clipped, do you think you can win by relying on a loose market? No way!
As an old hand who has been watching the crypto market for 8 years, I will first throw out my core opinion: this decision is not 'neutral'; it is hawkish! Many newcomers might ask, if the interest rate hasn't changed, isn't that stable? Wrong! The downward revision of the dot plot is essentially a signal of 'extended tightening cycle'. You have to understand that the crypto market is most sensitive to 'liquidity expectations'. Previously, a lot of capital entered the market betting on easing in 2025-2026, but now with the number of rate cuts halved, it essentially tells the market: the pace of liquidity easing will slow down and may even arrive later.
Let's talk about some practical matters and how this affects our positions. First of all, don't expect a big bull market in the short term! In the past few interest rate decisions, the crypto market has always been 'anticipation leads, correction follows,' and this time is no exception. Especially for some popular coins that have risen recently based on 'rate cut expectations,' they are likely to face profit-taking pressure, and the correction pressure will be relatively large. Secondly, looking at the medium term, the market will enter a more grueling 'volatile bottoming' phase. If the Federal Reserve does not relent, external funds will not dare to enter easily, and the market will likely bounce around in a range, testing everyone's patience.
Let me add a practical suggestion (just my personal opinion, not investment advice): now is not the time to heavily buy the dip; if you have profitable positions, you might consider reducing your holdings to lower your cost; if you haven't entered the market yet, wait a bit longer and don't be fooled by short-term small rebounds. The crypto market has always been 'when others panic, I am greedy, but the premise is to clearly see the big trend.' Right now, the big trend is that the Federal Reserve is still 'holding firm,' and we don't need to go against the trend.
Some friends might ask: So how long do we have to endure this? Personally, I believe we should wait at least until the second half of 2025, when the Federal Reserve gives a clear signal of 'preemptive rate cuts,' before the market truly begins a new round of trends. Until then, what we can do is 'preserve our principal and cultivate our internal capabilities,' focusing more on the inherent value of projects rather than staring at candlestick charts every day trying to guess the ups and downs.
Lastly, let me say something from the heart: the volatility of the crypto market has always been 'roller coaster level,' and each decision by the Federal Reserve is a 'stress test.' Only those who can endure this grueling phase will be able to reap the rewards when the market comes. I will continue to closely monitor the subsequent inflation data and FOMC statements, and will share the latest news in the comments section as soon as possible.
How much do you think the market will correct after this decision? Should we reduce or increase our positions? Follow me @链上标哥 so you don't get lost!
