In the past few days, $BTC dropped below $113,000, $ETH followed downwards. On the surface, this is related to the fluctuations in the Federal Reserve's interest rate expectations, but if we only stay at the level of 'the expectation of rate cuts has been shattered', we haven't grasped the core.

1. Why did the market choose to plunge before the meeting?

My observation is that this plunge resembles the market actively conducting a 'stress test'.

Investors have already realized that Powell cannot provide a clear dovish guarantee.

Rather than waiting to be 'slapped in the face' at the meeting, it is better to reduce positions in advance and release the risk.

This is not a passive response, but a form of risk management through preemptive action.

Therefore, this market movement is different from the past 'big drop after the speech'; instead, the market acted first.

2. The dilemma the Federal Reserve faces: it is not about 'whether to cut rates', but 'how to manage expectations'.

In my opinion, what the Federal Reserve is most worried about now is not the pace of rate cuts, but rather the overly preemptive market sentiment.

Once the market overhypes liquidity easing, it will amplify asset bubbles.

If the Federal Reserve cannot deliver afterward, it may lead to larger-scale sell-offs.

This means the Federal Reserve needs to 'cool down' during the meeting, but cannot do so too aggressively to avoid triggering widespread panic.

In other words, Powell is not 'setting interest rates', but rather playing an art of balancing rhetoric.

3. Why does the crypto market react more violently than the stock market?

My judgment is:

The crypto market lacks hedging tools: US stocks have options, and government bonds have hedges, but retail investors in crypto can only 'go all in or liquidate'.

High efficiency of capital inflow and outflow: with thin liquidity, institutions can cause waterfall-like fluctuations with just small adjustments to their positions.

Bitcoin has become an 'amplifier of expectations': any whispers about interest rates will be amplified tenfold here.

So this plunge does not mean 'the crypto market is the weakest', but rather it directly reflects the severe reversal of expectations.

4. My view

Short-term: This premature 'self-correction' might make the market less extreme on the actual day of the meeting.

Medium-term: Bitcoin's support depends on the direction of the US dollar; if the dollar continues to strengthen, crypto will remain under pressure.

Long-term: Rather than focusing on a single rate cut, it is better to pay attention to the liquidity curve for the next 6–12 months. The crypto market has never taken off due to a single policy reversal, but rather through a complete easing cycle.

The plunge in Bitcoin is not simply 'retail investors getting buried', but rather the market is preemptively negotiating with the Federal Reserve.

The key to this game isn't whether there will be a rate cut in September, but rather: who can truly control expectations—the Federal Reserve's microphone or the market's positions?#杰克逊霍尔会议 #加密市场回调 #币安HODLer空投PLUME