As a veteran in the crypto space who has watched Federal Reserve policies for 8 years, I really felt for my crypto brothers last night. On one hand, the market was bouncing up and down like a rollercoaster, and on the other hand, there was an internal conflict within the Federal Reserve, with the hawks and doves directly 'tearing each other apart'. This operation has completely stirred the market sentiment!
First, the conclusion: stop betting on a rate cut in December! This expectation has changed from 'high probability' to 'Schrodinger's cut', and what the crypto world is about to face is liquidity tightening pressure more stimulating than a girlfriend's mood swing.
Let's first analyze the core of this 'infighting': the hawks are using inflation data as their 'sword', bluntly stating that 'core PCE is still stuck at 3.7%, far from the 2% target, and cutting rates now would be like giving inflation a 'lifeline'.' This statement is valid, after all, the U.S. stock market is still partying at high levels, and consumer data has not cooled down. At this moment, relaxing monetary policy might truly waste more than a year of efforts to control inflation.
The anxiety of the doves also hits the nail on the head: “High interest rates have already cornered small and medium-sized enterprises. Investment willingness has dropped more severely than altcoins in the crypto space; if we keep holding on, the job market will inevitably 'explode.'” It’s worth noting that the number of initial unemployment claims quietly rose last week; although it hasn’t reached a dangerous range yet, this kind of “boiling frog” decline is precisely a warning signal for an economic turn.
In simple terms, this is a life-or-death decision between “protecting inflation” and “protecting employment,” and Federal Reserve Chairman Powell’s statement that “there are no clear plans for a rate cut in December” directly sets the tone for this debate—now is not the time for easing; let’s wait and see.
As a seasoned crypto analyst, I must provide solid insights here: the ups and downs in the crypto world are essentially a “liquidity game.” In the past few bull markets, which one didn’t rise on the tailwind of the Federal Reserve’s easing policies? A rate cut means more “idle money” in the market, and risk assets (including cryptocurrencies) will become a safe haven for funds; conversely, once the expectation of rate cuts cools down, funds will become more stingy than a mythical creature, not only staying out of the market but also withdrawing, directly suppressing coin prices.
More importantly, after last week’s 25 basis point cut, it immediately “changed faces.” This kind of policy flip-flopping will lead the market to form expectations of “continued tightening.” For the crypto market, this means: Bitcoin will struggle to break past its previous high, and altcoins will find it even harder to gain traction; volatility will become the main theme, and we cannot rule out the possibility of a wave of “expectation correction” adjustments.
Brothers, don’t be foolish and chase highs at this time! The survival rule in a volatile market is simple: preserving your capital is better than anything else. You might think buying the dip is a golden opportunity, but it could very well be a “grave” dug by the main force for you—right now, capital is on the sidelines, and no one is willing to be the “bag holder.” Blindly rushing in will only lead to repeated losses.
I have seen too many newcomers in the crypto space stubbornly holding heavy positions during policy shifts, only to end up losing all their profits. Remember: the Federal Reserve's policy shifts are never “sharp turns,” but rather “slow brakes,” and this “brake” pressing on the crypto world translates into real pressure.
Moving forward, keep a close eye on two signals: first, the Federal Reserve's minutes next Wednesday to see how divided the internal voting ratio is; second, the core PCE data next Friday. If it exceeds expectations again, a December rate cut could basically be pronounced a “death sentence.”
I will break down these key data points at the first opportunity and explain the underlying logic in the simplest terms, helping you avoid the pitfalls of a volatile market. Follow me, and you'll not only get first-hand policy interpretations but also learn position management techniques for a volatile market—after all, in the crypto world, finding a reliable analyst is harder than finding a reliable market trend. Instead of guessing blindly, it's better to follow experienced players to avoid detours!
The next market trends will not be about who earns more, but about who lasts longer. Follow me, and together we will stabilize our position amidst the storm, waiting for the next wave of liquidity tailwind to arrive so we can accurately jump in and reap the rewards!
