Breaking news! Old Powell is going to speak again, is the cryptocurrency market about to change?
Old Powell's speech this Friday may cause a stir in the cryptocurrency market. The market was hoping for a rate cut in September to ease the financial situation, but if he avoids discussing easing and only emphasizes inflation risks, expectations for liquidity will cool down. High-risk assets like cryptocurrencies are highly sensitive to liquidity; when money tightens, inflows slow down or even reverse, and in the short term, it will definitely lean bearish.
In simple terms, unmet liquidity expectations will lead to cautiousness and capital withdrawal. Specifically, assets with high volatility like $BTC may be sold off first; if prices drop sharply, those heavily leveraged long positions may face liquidation, accelerating the decline; large funds from institutions might also adopt a wait-and-see approach, and without buyers, prices can't hold up.
Before 10 PM on Friday, some may start to reduce positions in advance, leading to a gradual decline. If Old Powell clearly states that a rate cut is not urgent or that inflation has not met expectations during the speech, it could trigger a sharp drop; if he is vague, the market will have to guess, leading to even greater volatility. If the outcome is hawkish, the downward trend may continue until the September Federal Reserve meeting; if unexpectedly dovish, it could rebound.
Bitcoin is the most sensitive and may lead the decline in the short term. If it breaks below $112,000, the technical situation will worsen. $ETH will move with BTC; if it encounters issues with ETF approvals, the drop could be even sharper. Smaller altcoins are even worse, as tighter liquidity will lead to greater selling pressure than mainstream coins.
In the short term, don't bet on direction; reduce leverage first and avoid heavy positions before the speech. Keep an eye on the $60,000 level for Bitcoin; if it breaks, be cautious. You can use put options or short futures to hedge risks. If Powell suddenly turns dovish and mentions multiple rate cuts within the year, you could quickly go long to catch the rebound.
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