Last night's market doused cold water on all traders eagerly anticipating an interest rate cut. Although the Federal Reserve's interest rate decision will officially be announced at 3 AM Beijing time on Thursday, the market fluctuations last night were like a precise trailer, prematurely revealing the harsh core of this macroeconomic drama.
Let’s first take a look at the plot of this trailer: the market seems like a runner injected with stimulants, muscles tense and heart racing due to expectations of interest rate cuts before the resolution is announced. However, any hint of news can cause this overly excited runner's muscles to spasm and stumble. Last night's sharp rise and fall is the most typical manifestation of 'anticipation anxiety'—the market is paying for potential disappointments with its decline.
Review: Old Chen's prediction versus the market's slap in the face.
In yesterday's early morning article and live broadcast, Old Chen said until his mouth was chapped: 3150-3180 is the current life-and-death line for the second coin! A charge without accompanying volume is just playing tricks, charging once means dying once! What was the result? The market perfectly validated it.
ETH seems to be pressed down by an invisible ceiling; several attempts to break into the 3150-3180 area feel like hitting a solid wall, with weak volume and thin follow-up positions. Ultimately, under the combined force of cooling macro sentiment, it couldn't hold up and slid down to around 3100 dollars.
Deep decoding: Why is the interest rate cut imminent, yet the crypto circle is collectively 'impotent'? Old Chen reveals the cold truth!
Everyone is asking: Clearly rates have been cut, clearly it's good news, so why are Bitcoin and Ethereum falling instead of rising? Old Chen today directly breaks through this window paper, the reason is far more brutal than it seems:
Truth one: This is not a dovish rate cut, but a disguise of a hawkish victory. Although the market expects a 25 basis point rate cut, the entire posture of the Federal Reserve—from the internal division of the dot plot to Powell's firm statements about inflation still being high and not considering the next steps—loudly declares: The door to easing is not open; this is merely a tactical adjustment, not a strategic shift! The subtext the market hears is: The road ahead will be bumpier, and liquidity will not flood easily. This is a fundamental weakening of the driving force for cryptocurrencies that rely on liquidity illusions and future narratives.
Truth two: The crypto circle has over-leveraged its expectations of a bull market. In the past few months, from the approval of ETFs to expectations of rate cuts, every piece of good news has been pre-emptively speculated and wildly priced by the market. The price already contains the dream of a perfect rate-cut cycle. When reality is revealed, and it turns out that the Federal Reserve only offered a diluted beer instead of unlimited champagne, a huge expectation gap arises. What fell yesterday was this portion of illusory premium.
Truth three: The return of macro dominance exposes the fragility of the 'independent market' in the crypto circle. In the face of genuine expectations of tightening global central bank monetary policy (or merely marginal easing), the so-called 'decoupling' and 'safe-haven properties' of the cryptocurrency market appear extremely fragile. It proves once again that it remains part of the global high-risk asset class. When US stocks adjust due to hawkish signals, and the dollar index strengthens, the crypto circle cannot stand alone. Funds are re-evaluating: in an environment of prolonged high interest rates, what is more attractive than cash and US bonds?
Survival guide upgrade:
The rules of the game have changed. Old Chen has distilled three new rules for you:
Abandon the linear thinking that good news must lead to a rise: we are entering a complex game of buying rumors and selling facts. In the future, for any macro event, the focus will no longer be on the outcome, but on the gap between the outcome and the market's extreme expectations. The larger the gap, the greater the volatility.
The key level is a touchstone and a life-and-death line: for ETH, 3100 has changed from support to a mid-axis, with strong resistance above at 3180, and the area below 3000-3050 has become the necessary lifeline for bulls and bears. Any rebound that cannot break through resistance with strong volume is an opportunity to reduce positions or short-sell.
Shift from trend betting to range and volatility trading: before a new consensus is reached within the Federal Reserve and clear easing guidance is given, the market is likely to enter a phase of high volatility and oscillation. This means that chasing prices and selling at lows is the most dangerous strategy. Learning to position for rebounds at key support levels, to guard against declines at key resistance levels, or using options tools to leverage volatility itself is the choice of smart money.
Finally, Old Chen points out:
This week's meeting is essentially a stress test of the market's belief in the central bank as the savior. When the focus of the test shifts from 'whether to cut rates' to 'why cut rates' and 'what to do next', simple optimism has already died.
For awake traders, this is both danger and opportunity. Where consensus collapses often hides mispriced chips and a brand new trend starting point. But the premise is that you must remain calm, adhere to discipline, and observe, wait, and then strike like a true hunter amidst the coming storms.
Follow Old Chen, and he will help you navigate through the fog of policies, finding your own share of profits on the knife-edge of fear and greed. Late Wednesday night, we will face this macro judgment together and seize the new world after the judgment.
