$BTC Tonight is the decisive moment!! Big things are coming,
Powell will deliver a fatal blow to the market.
I don’t like beating around the bush. Regarding the Fed's "triple whammy" early tomorrow morning, my judgment is: short-term bearish.
The logic is as follows:
1. Powell will deliberately adopt a hawkish stance for the sake of “independence.”
Reason: President Trump’s public pressure on the Fed (demanding immediate and significant interest rate cuts) has reached an unprecedented level.
And Powell’s term will end in May. If he shows signs of compromise in January, he will be recorded as the “least independent Fed Chair in history.” To defend his professional reputation and the credibility of the Fed, he is likely to exhibit extreme hawkish patience at the early morning press conference. He will emphasize that inflation remains strong, thereby completely dispelling the market's fantasy of rate cuts in March.
2. Liquidity crunch triggered by the “expectation gap.”
The consecutive rate cuts by the end of 2025 have made the market’s “appetite” larger. Tomorrow morning, the FOMC's decision statement is likely to remove or downplay the wording of “further easing.” This shift from “expected easing” to “certain waiting” will trigger profit-taking by highly leveraged speculative funds, leading to a significant market correction.
3. Data vacuum period.
Due to the previous government shutdown, the real economic data for December and January is lagging and distorted.
When the road conditions are unclear, the Fed's defensive reaction is to “tighten their pockets.” As long as Powell says, “Due to data quality issues, we currently do not have the conditions to adjust policy,” the market will interpret it as meaning that liquidity will not increase at least until the May transition.
Of course, this is just my personal off-the-cuff analysis; we’ll see what happens in the morning, but it can serve as a reference.
My personal suggestion is not to bet on uncertainty. It’s fine to enter the market later; just keep an eye on it.
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