The Federal Reserve is sending hawkish signals, causing market volatility.


Federal Reserve Chairman Jerome Powell explicitly stated at a press conference that while this rate cut aligns with market expectations, the future frequency and magnitude of rate cuts may be much lower than previously assumed by the market. Powell emphasized that the Fed plans to cut rates only twice in 2025 and also raised the inflation expectation for 2025 from 2.1% to 2.5%.

U.S. Federal Reserve Chairman Jerome Powell stated that central banks are not allowed to hold Bitcoin and, in the face of President Donald Trump's promise to create a strategic Bitcoin reserve, "is not seeking legal changes."

Bitcoin leads the decline, and the crypto market is under pressure overall.


Bitcoin's price quickly dropped 5.6% after the Federal Reserve announced a rate cut, hitting a low of $99,000. Ethereum fell from around $4,000 to about $3,500, which also caused a collapse in altcoins.

The altcoin market, with a few exceptions, is mostly in a downward trend, especially in the AI, MEME, and L1 categories. In the past 24 hours, the AI sector saw WLD drop over 13%, ARKM drop over 17%, and RENDER drop over 11%. In the L1 sector, SOL dropped over 8%, SEI dropped over 13%, and SUI dropped over 9%. In the meme sector, PEPE/BONK/FLOKI/WIF all saw drops of over 18%.

In terms of contract data, $672 million in liquidations occurred across the network in 24 hours, with long liquidations amounting to $575 million. More than 236,000 people globally were liquidated, with the largest single liquidation happening on Binance for ETH/USDT, valued at $4.0677 million.

The market is currently filled with risk-averse sentiment. Next week, there is Christmas, followed by New Year's Day. During this time, liquidity is very low, U.S. stocks are on holiday, and the market is completely influenced by retail investor sentiment.

Although the market is in a pessimistic state, there are still catalysts worth looking forward to in January next year.

On January 20, Trump was officially inaugurated as President. Changes under favorable policies will facilitate institutions to confidently and boldly flow funds into the crypto market, thus raising the prices of crypto assets.

For example, Bitcoin's monthly return surged over 44% during this year's Lunar New Year in February. January 29 of next year marks the Lunar New Year. Perhaps the market will experience a turning point in January.

Furthermore, the FTX restructuring plan will take effect in early January, with compensation funds being distributed via fiat and stablecoins, bringing billions back to the market.

Although January next year is worth looking forward to, we cannot let our guard down. Market cycles are highly volatile, and investors should pay attention to risk control.


Is it possible to bottom-fish at this position?

There is no need to rush into bottom-fishing. A strategy of 'buying heavily on large dips, buying lightly on small dips, and not buying on no dips' can be used to gradually pick up low-priced chips. The current market situation shows that Bitcoin and Ethereum, supported by spot ETFs and traditional large capital, have substantial buying pressure below, so the downside is limited.

In times of low market liquidity and depressed sentiment, it is recommended to avoid new coin projects on Binance. We can primarily hide in those projects with long-term narratives.

Patience is needed to wait for bottom-fishing opportunities—strong narratives are present.

- Trump concept


➫ Looking forward to the market after Trump's inauguration from January to March next year, if seeking stability, ETH, BNB, and SOL should be prioritized, while those wanting to take risks can choose ACT, PNUT, etc.

➫ The Trump family crypto project WLFI purchased $250,000 in $ENA, currently holding $ETH, $WBTC, $LINK, $AAVE, $ENA, and $ONDO. As U.S. policies continue to improve, WLFI's positioning may become a market barometer.

- MEME sector


For those seeking stability, in the meme sector, options include: DOGE, PEPE, WIF, FLOKI, etc.


➫ To reiterate, the core asset of Doge is primarily led by $DOGE, along with other meme coins like Neiro, Shib, Babydoge, etc. In the future, it's highly probable that funds from Doge will overflow to other dog-themed ecosystems.

- Public chains

Public chains should choose some well-established ones that already have good popularity, such as APT, SOL, and SUI.

- AI sector


➫ For the AI sector, selecting FET, including WLD, will suffice; however, I am more optimistic about FET, especially with DWF as a market maker partner, making it less likely for the price to drop significantly.

➫ AIMeme is also a well-worn topic. In terms of exchanges, noteworthy ones include ACT, GOAT, Virtual, etc.

╰There are currently many promising AI platforms and tokens in the first tier, such as AIXBT from the Virtual platform, ai16z from the Daosfun platform, and so on.

- DEFI sector

The first choice to consider is still AAVE, including COMP. We have zero-cost positions in these. Friends who want to enter again will need to wait for lower prices. Additionally, MKR itself is fine; it just got dragged down by Ethereum. If there are no stop losses, it can be held normally, just control the position and avoid futures.

As for positions, it still depends on everyone's habits. Of course, it is also recommended that everyone arranges reasonably. If the allocation is insufficient, you might as well pick a part from the above sectors to layout. As long as the fundamentals and projects are still operating, time will give you answers and some wealth.