Many people must have been bewildered when they looked at the market this morning: Clearly, the news is all over saying "The Federal Reserve has cut interest rates", so why is BTC not rising but instead plummeting? Could it be fake news?
Don't worry, let's translate the dry financial jargon from the news into plain language, and you'll understand why this is actually a "sugar-coated bomb".
1. The so-called good news is all "old news"
News fact: The Federal Reserve announced a 25 basis point rate cut, lowering the rate to 3.50%-3.75%.
Plain interpretation:
It's like you are a child (the market), you scored 60 points, and your dad (the Federal Reserve) promised you last month to buy you a PS5. When the PS5 is brought home today, will you jump for joy? No, because you already knew about it.
Crypto logic: The market had long anticipated this 25 basis point cut; smart money had already bought in and positioned itself half a month ago. When the news was announced today and the good news was realized, those who had positioned themselves took profits (Sell the News), which led to the market crash.
2. The future "big cake" has shrunk (this is the core of the crash!)
News fact: The dot plot shows that only one rate cut is expected in 2026.
Plain interpretation:
This is the most critical part! Originally, the market's gamblers thought that next year (2026) the Federal Reserve would continuously cut rates like handing out candy, flooding the market with liquidity, and the crypto bull market would take off.
But then Powell (the Federal Reserve chairman) said coldly today: "There won't be much candy next year, maybe just one piece for you."
Crypto logic: Since there won't be much liquidity next year, money will still be tight, and the cost of capital will remain high. The anticipated bull market engine has stalled halfway, and of course, the bulls will be scared and rush to escape.
3. Internal "fighting" within the Federal Reserve, hawks are rising
News fact: In the voting, three people voted against, and someone even suggested not to cut rates.
Recently tried using ave to test the waters just got a small car #ave #美联储降息 $BTC
