Last night, the market experienced a significant pullback. After the announcement of the U.S. Federal Reserve's interest rate decision today, the crypto market began to plummet. Bitcoin fell sharply, nearly dropping below the $100,000 mark, while Ethereum also dipped to $3,650. The total liquidation volume across the network in the past 24 hours reached $702 million, with over 253,000 people liquidated.
Now, I will share with everyone my interpretation of the Federal Reserve's policy.
The two points that have the greatest impact on us are:
1. According to the results released last night, the Federal Reserve is expected to cut interest rates twice in 2025, while the previous expectation in September was to cut rates four times, effectively halving the rate cuts.
2. Federal Reserve Chairman Powell stated: 'Under current U.S. law, the Federal Reserve has no legal basis to hold Bitcoin, and the Federal Reserve will not modify existing laws just to hold Bitcoin.'
The above two points are significant reasons for the market downturn, shifting the Federal Reserve's previously aggressive monetary policy to a more moderate and neutral stance.
The fluctuations in the secondary market are often influenced by two factors: first, the narrative, and second, liquidity. Currently, from the overall perspective, a phase-top is very evident, and a top divergence has appeared. As for when the final wave, the fifth wave, can begin, that remains uncertain for now.
I personally feel that Bitcoin will oscillate around $100,000 for several days, and eventually, it may drop to around $88,000 to $90,000. After forming a bottom in this range, the fifth wave of the market will officially begin.
What can be reasonably inferred now is that in January 2025, it is highly unlikely there will be an interest rate cut; March is also expected to be the same. It is very likely that the next rate cut will be postponed to around April or even May. The Federal Reserve's final interest rate is expected to drop to around 3%, while the current rate is 4.25%. It will take over three years, with two cuts in 2025, two in 2026, and one more in 2027. The rate cut cycle will be very moderate and neutral. So, we need to be patient. Whenever there is a high, consider reducing positions, and when there is a low, consider adding back. Keep it up! Friends!
