Hey folks, last night Powell gave a standard 'dovish performance' in front of the camera, hinting at interest rate cuts, expanding the balance sheet, and acknowledging employment risks—a full set of combos that seemed flawless. But the market? Bitcoin surged and then fell back, while Ethereum directly performed a 'free fall' from a high of $3447. Does this plot seem a bit familiar? When good news is fully priced in, it becomes bad news! The market has already digested the expectations completely; when the news lands, all that's left is a mess and the sound of the scythe.
But I say, the show is far from over! Powell personally stuffed the script for the next act into tonight's cold data at 21:30. He clearly stated that the Federal Reserve will 'eat data' in the future. In plain language, it means: I won't guide you for now; whether it goes up or down, you can guess from the data yourselves! The initial jobless claims number for the week ending December 7th, released tonight, has become the first imperial edict of the data-dependent era, as well as the first 'Judgment Day' for the global market.
1 Why can a weekly released data point determine life and death tonight?
Because it directly hits the most vulnerable point in the current global game: the cracks in the labor market. Last night, the cornerstone of all of Powell's dovish statements was his acknowledgment of the downward risks in the labor market. He even hinted that the employment growth data in recent months may have considerable 'water content'.
This means that whether the Federal Reserve continues to cut interest rates in the future, or even how quickly, depends on whether the labor market truly deteriorates. The number of initial unemployment claims is the most real-time and sensitive thermometer for measuring the health of the labor market.
The expected value for tonight is 220,000 people. This number itself is a key psychological threshold.
If the published value is < 220,000 (for example, unexpectedly strong, dropping below 200,000): that would be a heavy blow to the market. This indicates that the labor market remains resilient, and Powell's worries may have been exaggerated. The result is that the threshold for the Federal Reserve to cut interest rates is instantly raised. The market will panic and realize that the Federal Reserve may have more reason to stay put, and the number of rate cuts next year may be significantly reduced. Thus, the decline after last night's good news is just an appetizer, and a larger wave of selling will come, with the dollar strengthening and risk assets under pressure.
If the published value > 220,000 (if significantly higher than expected, such as exceeding 240,000): it would validate Powell's concerns on the spot, confirming that the labor market is rapidly cooling. The market will immediately interpret this as: with such significant downward pressure on the economy, the Federal Reserve must accelerate rate cuts next year to extinguish the fire! Therefore, the frenzy of risk assets could be ignited in an instant, the dollar could plunge, and gold, US stocks, especially interest rate-sensitive cryptocurrencies, could experience a violent rebound.
2 The crypto market has long been a startled bird.
Friends, don't forget that the crypto market is also struggling to survive. Since hitting an all-time high in October, Bitcoin has retraced nearly 30% in a month and a half, even falling below the psychological threshold of $90,000, completely erasing the year's gains.
The core reason is the sharp turn in liquidity expectations at the macro level.
The Bitcoin spot ETF that previously drove the market up has seen fund inflows change to continuous net outflows. Some long-term institutional investors chose to take profits before liquidity tightens, which has silenced the most important external source of incremental funds for the market.
At the same time, the internal structure of the market is also very fragile; excessive leverage combined with swinging emotions makes the market more susceptible to liquidity shocks. Just a few days ago, there was an occurrence of over $1 billion in liquidations in a single day, and the bullish forces are almost drained.
So, the crypto market is like a pile of dry kindling right now, and tonight's data is that matchstick. If the match is lit well, it could spark a rebound; if not, it could lead to a disaster.
3 My personal judgment and survival guide
Ultimately, the Federal Reserve returning to a 'data-dependent' mode means we will enter a phase of high volatility and high uncertainty. The market will react excessively like a startled bird to every economic data point.
I have a few personal views on tonight's data and subsequent operations:
Don't be led by short-term emotions: regardless of whether the data is good or bad, the market's initial violent reaction is often mixed with emotional and leverage-driven movements. A rebound brought about by positive data is not necessarily a signal of a trend reversal; it may instead be an opportunity for bulls to reduce positions; while a collapse triggered by negative data could also be overly pessimistic.
Cash can sometimes be the best chip: when the market faces tightening liquidity, whether you are in risk assets or safe-haven gold, you may be indiscriminately sold off to raise cash. What truly possesses safe-haven attributes is cash and highly liquid assets.
When the direction is unclear, holding cash and patiently waiting for opportunities is smarter than blindly rushing in to catch falling knives.
Pay attention to longer-term logic: No matter how severe the short-term fluctuations are, they cannot completely negate the long-term narrative of crypto assets. Institutionalization and compliance are still key, and in the future, we need to pay attention to the recovery of ETF funds, the clarification of global regulatory policies, and the penetration of actual application demand.
Tonight at 21:30, don't just look at a single number. Look at how this number tears apart the consensus of the market and sets a brutal tone for trading for at least the next month.
Buckle up, this is no longer Powell's solo act; it's a battle between bulls and bears over micro data. In the 'data-dependent' guessing game, any unexpected event could become the last straw that breaks the camel's back. For a market that has already been overly hyped, any rebound is a God-given opportunity to escape or position.
There are no gods in the crypto circle, only smart people who can read signals and remain calm. Follow me for practical strategies shared daily, and together we will find direction in the storm.
