The White House is making moves, is the Federal Reserve about to hit the gas?
White House economic advisor Hassett dropped a bombshell, stating that U.S. inflation is only 1.6% when calculated over three months, already below the Federal Reserve's 2% target, indicating significant room for interest rate cuts. This is consistent with the White House's own claim that core inflation has reached a multi-year low. This suggests that politicians are eager to inject a 'loose' boost into the market.
What was the market's reaction? Bitcoin is currently hovering around 90,000, and the fear and greed index has fallen to 25, indicating 'extreme fear.' Even more startling, in the past 24 hours, the entire network saw a blowout of $484 million, most of which was due to long positions being forcibly liquidated. On one side, high-ranking officials are calling for warmth, while on the other, the market is bleeding profusely, creating a stark contrast.
My view is that we should not just listen to what they 'say,' but also look at what they 'do.' Interest rate cuts are the pie for the future, but right now, the market's leverage has not been cleaned up, and short-term volatility is inevitable. However, there is a critical turning point here: the Federal Reserve's quantitative tightening officially ended on December 1, and it is said that a new plan to inject $40 billion in liquidity monthly will be launched. This is akin to a tightened faucet beginning to loosen, though the water flow has not yet fully burst forth.
What impact does this have on us? Remember one thing: liquidity is the lifeblood of the crypto circle.
Don't get carried away in the short term: market sentiment is extreme, and leverage is a suicidal knife. With poor liquidity at the end of the year, there can be wild swings, so keep your hands steady.
For next year's layout: If the Federal Reserve truly shifts to easing as the White House wishes next year, combined with current on-chain data showing someone is quietly bottom-fishing, then every deep correction now could be cheap chips prepared for next spring's market.
The market is currently shrouded in fear, but the juiciest profits often emerge from such divergences. A key question is: while everyone is focused on when the Federal Reserve will cut rates, are they ignoring another larger variable that is about to ignite the market?
Want to know what this overlooked variable is and how to lay out in advance? Follow me, and I will tell you directly in the next issue.
There are no deities in the crypto circle, only teachers with a good mindset. If you don't know what constitutes an effective breakout or which coins can yield 10 times returns, follow Tiangji for guidance and come get it! 聊天室
