$BTC $ZEC $ETH The Federal Reserve's year-end drama comes to a close, with signals splitting to the point of confusion!
🎉 Let's start with the good news: the liquidity has truly arrived! The third interest rate cut of the year has landed, starting from 2026, purchasing $40 billion in bonds every month—liquidity bombs are loaded, and the market is celebrating wildly, with calls for a 'Christmas rally' echoing everywhere. In the short term, this is undoubtedly a strong stimulant for risk assets. 🧯
🫵 But the emphasis is always on what comes after 'but'!
1️⃣ This could be the 'last dance'—the dot plot suggests there will be at most one cut next year, and Powell continues to speak hawkishly. This is called 'raising rates with the mouth and providing liquidity with the hands.'
2️⃣ The economy is still a mystery box, with key data delayed, and the U.S. trump card hasn't been revealed at all. If subsequent data explodes, all easing expectations could be overturned in an instant.
So, don't get too carried away! This is just a 'technical easing' to prevent the market from running out of fuel, not a signal to hit the gas pedal hard.
🔥 Why hasn't the crypto market exploded?
Data clarifies it for you:
· A 25 basis point rate cut, bringing rates to 3.50%-3.75%, with a vote of 9:3, the internal debate is fierce.
· $40 billion in monthly bond purchases has started, clear liquidity signals.
· However, the options market is extremely cautious: by the end of December, options positions exceed 50%, with BTC's major pain point hovering at $100,000 and ETH at $3,200, indicating that large funds are not going crazy at all.
The truth behind the market weakness is twofold:
✅ The good news has already been fully digested, which is why 'good news fully priced in becomes bad news.'
✅ Christmas + year-end settlements lead to poor liquidity and low activity, hence it's hard to rally the market right now.
📌 Retail investors remember two things:
1️⃣ Hold onto your core assets BTC/ETH steadily, don’t panic if they drop, and don’t get carried away if they rise—long-term declining interest rates are still a support.
2️⃣ Keep a close eye on subsequent employment and inflation data, as policy divergences will be the explosive trigger for the next market shift.
Big market movements rely on cycles, not on single news. When everyone is numb, it often becomes a window for gradually accumulating positions.
🎯 In terms of operations: you can take advantage of short-term participation, but definitely keep your positions light and set stop losses. The tide of liquidity will eventually lift the boat of value, but before that—stay steady, and you'll be able to smile in the end.
Do you have positions in hand? Let’s discuss your strategy in the comments!
