Last night, the market experienced a significant pullback. After today's announcement of the U.S. Federal Reserve's interest rate decision, the crypto market began to plunge, with Bitcoin nearly dropping below the $100,000 mark, and Ethereum also sharply falling to $3,650. The total liquidation volume across the network in the past 24 hours reached $702 million, affecting over 253,000 individuals.
Next, I will share my interpretation of the Federal Reserve's policies.
Two points have the greatest relevance to us:
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 four times, which is a direct halving of 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 decline, 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 apparent, and a top divergence has occurred. As for when the final wave, the fifth wave, can begin, that is still uncertain for now.
I personally feel that Bitcoin will oscillate around $100,000 for several days, and it may eventually drop to around $88,000 to $90,000. After forming a bottom in this price range, the fifth wave of the market will officially begin.
It is now basically certain that the Federal Reserve is very unlikely to cut rates in January 2025, and March is also estimated to be unlikely. It is highly probable 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 about 3%, while the current rate is 4.25%, and this will span over three years: two cuts in 2025, two in 2026, and one more in 2027. The rate-cutting cycle is very moderate and neutral. Therefore, patience is still needed. Whenever there's a spike, reduce positions a bit, and then buy back at dips. Keep it up! Friends!
