Next week, the Federal Reserve's 'super week' will kick off, and the nerves of global markets are tightly wound, with the crypto world standing at the forefront of the storm—a 'life-and-death test' concerning the direction of the market is quietly approaching.
The two major 'moves' soon to be released by the Federal Reserve—the minutes from the monetary policy meeting and Powell's speech at the Jackson Hole central bank annual meeting—are like a 'nuclear bomb' that could shake the crypto world. Every subtle change in these two signals could trigger waves in the crypto market, causing thrilling volatility.
Looking at this week's U.S. economic data, it's like a 'contradictory entity': retail sales data is soaring, clearly indicating strong resilience on the consumer side; yet the consumer confidence index has plummeted like a roller coaster, and inflation expectations are skyrocketing, exposing the hidden worries behind the economic operation in plain view. What’s even more concerning is the division within the Federal Reserve regarding whether to cut interest rates in September, with officials holding differing opinions and arguing fiercely. Additionally, service sector inflation remains stubbornly high, creating even more uncertainty about policy direction.
For the crypto world, Powell's speech is the focal point among focal points, with everyone's eyes fixed intently on it. The crypto market's sensitivity to changes in liquidity has been repeatedly validated: if Powell hints even a little at 'cutting rates' during his speech, market liquidity could improve, with funds flooding into the crypto market like a tide, and the market would naturally surge with renewed energy; however, if he remains steadfast in fighting inflation and insists on maintaining a tight policy, the crypto market may be doused with cold water, leading to immediate pressure for a correction.
Moreover, other Federal Reserve officials will also be speaking frequently, and initial jobless claims and PMI data will be released in succession. This information is like sparks that could ignite at any moment, adding fuel to the already volatile crypto market and making the situation even more perplexing.
Crypto investors need to be extremely vigilant and not harbor any illusions. These key messages are like hidden switches that could completely rewrite the K-line trend at any moment. Every statement from the Federal Reserve and every piece of economic data acts as a baton that influences the market; even the slightest movement could lead to dramatic changes. After all, the rhythm of volatility in the crypto market has always been tightly bound to the pulse of Federal Reserve policies.
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