Is the entire market's favorable sentiment exhausted or is it a bull market trap? After the Federal Reserve's interest rate cut, Bitcoin rebounded from a decline; is this a trap or the beginning of a real crash?
We are currently in a broad rebound phase after a significant decline in a bear market. The most intense phase of decline has most likely passed, but it will take time for market confidence to recover, and the market will fluctuate up and down repeatedly, overall solidifying the bottom.
The expected interest rate cut and technical expansion of the balance sheet failed to boost the market, mainly because the favorable news has been digested in advance, buying expectations, and selling facts. More importantly, there are significant disagreements within the Federal Reserve regarding future policy paths, and the dot plot indicates a more conservative expectation for interest rate cuts in 2026, which undermines the market's optimistic expectations for long-term easing. Although expansion of the balance sheet was announced, its scale and purpose are clearly defined as maintaining ample reserves in the banking system rather than large-scale "flooding" of liquidity, making it difficult to form a strong new liquidity drive in the short term.
The signals released at this meeting are complex, even contradictory. The key is that there is uncertainty about who will lead the interest rate path in 2026, as there may be changes in the senior personnel of the Federal Reserve next year.
For most retail investors, attempting to accurately predict the impact of every macro event is almost impossible. The interpretation of policies and the market's actual response often have a "time lag" and "expectation gap." Therefore, rather than trying to interpret every macro noise, it's better to focus on identifying and following the real trends in the market. When the trend is clear, the certainty of action is much higher than trying to guess the intentions behind news.
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