3 AM, the Federal Reserve's "medicine" is coming, but this time the medicine may be a bit "toxic"!
The market is basically betting on a 25 basis point rate cut tonight. But everyone, don't rush to pop the champagne, this good news might just be a remnant. Because the real drama unfolds after the rate cut: a standard "hawkish rate cut" is in play.
What does that mean? It means they give you a rate cut on the surface, but the underlying message is harsh. The Federal Reserve is in a heated debate, with supporters and opponents of the rate cut nearly evenly matched. Chairman Powell's biggest task tonight is to pour a bucket of cold water on you, telling you "this rate cut does not mean there will be continuous cuts", and that future rate cuts will have a much higher threshold. It may even imply that action will wait until the job market "significantly deteriorates".
Impact on the crypto space? In a word: don't expect a "dovish" flood to boost crypto prices in the short term; rather, be careful of being scratched by the "hawk's claws".
Short-term volatility intensifies: One hour after the decision is announced, the market will be very exciting, but the true direction will become clear only after Powell finishes the press conference. If his tone is sufficiently "hawkish", harsher than expected, then Bitcoin could retest 85,000 or even lower for support, which would not be surprising at all.
The long-term logic remains unchanged, but the pace has changed: the long cycle of rate cuts is still in play, liquidity will eventually return, which is the trump card supporting the bull market. But the Federal Reserve clearly wants to hit the "brakes" slowly this time, which means the market is unlikely to see a frenzied bull run, but rather could be in a severe fluctuation, gradually carving out a new bottom.
What should players do?
Don’t become cannon fodder! Remember three points:
Don’t chase the highs: If the market surges sharply after the news breaks, it is likely a trap, a "fireworks show" for you to watch.
Control your hands: Before Powell makes a clear statement, observe more and act less. The market trend often only truly reveals itself 12-24 hours after the decision is announced.
Wait for the golden pit: This hawkish statement is precisely creating our next opportunity to enter. If the market creates a deep pit due to disappointment, that’s when you should gradually position yourself.
Want to know which key levels are absolute lifelines that cannot be broken if the script really turns "hawkish" tonight? Which altcoins will be the first to crash in this turbulence? Follow me, after the press conference ends, I'll highlight the key points and danger zones for you.
