A few days ago, a single statement from Powell pushed the probability of a rate cut in September to 91%, and the crypto market followed suit—BTC stabilized above $110,000, and OKB surged 123% in a week, with many people shouting "the bull market is secure". But just a day later, "the new Federal Reserve correspondent" Nick Timiraos threw out a "cooling article", with signals throughout saying "don't think too much". Veteran players adjusted their positions after reading it: this wave of rate cut expectations may be about to "change flavor"!
It's important to know that this article was published 24 hours after Powell "hinted at rate cuts". Timiraos had ample time to communicate with the Federal Reserve internally, containing both officials' "whispers" and his precise interpretations, essentially equivalent to the Federal Reserve's "official follow-up"—behind the seemingly stable total market cap of $4.02 trillion and BTC's 57.7% share lies a hidden undercurrent stirred by policy.
1. The article starts by dismantling: a rate cut might happen in September, but it is not the beginning of an "interest rate cut cycle".
The article starts by dousing the market with cold water: "Powell said a rate cut might happen in September, but that's not to make you think rates will continue to fall!"
This statement translates very directly: September may provide a "insurance-style rate cut", but wanting to start the good days of a "continuous rate cut"? Not a chance!
Compared to the previous market's 91% probability of rate cuts, it now feels more like "a bucket of cold water poured over your head"—keep in mind that this round of increases in the crypto market (OKB's surge, ETH stabilizing above $4,200) is largely supported by "expectations of rate cuts". If it’s just a "one-time rate cut", with no further policy support, the market could very likely shift from "frenzy" back to "consolidation", or even correct.
Some veteran players in the group said: "The Federal Reserve did this in 2021 too, first hinting at easing, then hitting the brakes once everyone rushed in, BTC fell from $60,000 to $30,000. This pattern is too similar now!"
2. Compared to last year's speeches: this year's "interest rate cut signal" is as soft as cotton, the Federal Reserve itself is unsure.
The most heart-wrenching part of the article is putting together Powell's two Jackson Hole speeches, highlighting the stark difference that wakes people up:
Last year: "The time for policy adjustment has come, and the direction of progress is clear"—a single statement set the tone, and the market instantly understood "liquidity is coming". Subsequently, BTC rose from $19,000 to $69,000, with a clear trend.
This year: "The balance of risks seems to be shifting, and policy adjustments may be necessary"—the entire time not mentioning direction or intensity, not even clarifying whether "adjustment" means easing or tightening. In simple terms, it’s saying "we haven’t decided yet, let’s take it one step at a time."
It's like the boss making promises: last year it was "the salary will definitely increase next month, and the amount has been calculated", this year it's "there may be an increase in the future, but it's uncertain when and how much"—the Federal Reserve itself is unsure, so why should the crypto market continue to surge?
Combining current market data shows: the US Bitcoin ETF had a net outflow of $1.178 billion this week, and the Ethereum ETF saw a net outflow of $233 million, indicating that institutions are quietly withdrawing funds and not fully trusting in the "interest rate cut frenzy". Now the Federal Reserve is sending out "ambiguous signals"; future funds may become more cautious, making it more difficult for BTC to stabilize at $117,000 and ETH to reach $4,700.
3. Internal disputes + inflation data is about to explode, the possibility of a September rate cut may "die down by half".
What's worse are two bad news items, which directly cast doubt on the prospect of interest rate cuts in September:
1. There is no consensus within the Federal Reserve; two core leaders oppose rate cuts.
The article directly pointed out three individuals opposing rate cuts, two of whom are core members of the Federal Reserve—Cleveland Fed President Harmack and St. Louis Fed President Musalem. If these two continue to stand firm, even if there is a rate cut in September, it can only be a "one-time benefit", not the "rate cut cycle" everyone is looking forward to.
It's like you thought the boss would raise salaries every month, but instead only gave a one-time holiday bonus that was quickly spent—without ongoing policy support, the crypto market could likely see a repeat of the scenario of "rising quickly, falling even faster". Friends who chased high with OKB and BIO (which rose 131% in 7 days) should set stop-losses in advance.
2. Next Friday's inflation data is set to explode, potentially extinguishing rate cut expectations.
Next Friday, the Federal Reserve will release July's core PCE data, which is expected to grow by 2.9% year-on-year, the highest value in half a year! It's important to know that the Federal Reserve's inflation target is below 2%. If the data is indeed this high, don’t even talk about rate cuts; not raising rates would be considered good.
I fell into the same trap in 2018: at that time, the Federal Reserve hinted that they "might pause rate hikes". I heavily invested in ETH, only to see inflation data exceed expectations, and the Federal Reserve directly stated they would "continue raising rates", causing ETH to plummet from $800 to $100. Thinking back, it was terrifying. The situation is similar now; if PCE exceeds expectations, the 91% probability of rate cuts may be cut in half, and BTC and ETH will likely follow with corrections.
Emergency response strategies for crypto market players.
Taking into account the current market (total market cap of $4.02 trillion, RSI neutral to strong) and the Federal Reserve's cooling signals, these three things must be done:
For those with profits, reduce your positions and secure gains.
If you hold surging coins like OKB and BIO, or have unrealized gains in BTC and ETH, consider reducing your position by 20%-30%. Don't wait until the Federal Reserve releases negative news to panic. For example, OKB surged 123% in a week, and many profits have been made. If there's a correction, it could be sharp, so securing some profits is prudent.
Don't chase highs! Wait for a correction to reassess.
Currently, BTC is fluctuating between $112,000 - $117,000, while ETH is oscillating between $4,200 - $4,700. Don't chase highs just because you're afraid of missing out. If expectations for rate cuts cool down later, BTC might retest $110,000 and ETH $4,000, making it safer to enter then.
Keep an eye on two individuals + one piece of data.
Next, pay close attention to the speeches of Harmack and Musalem. If they continue to oppose interest rate cuts, a September cut will likely be a one-time event; next Friday's core PCE data is even more critical. If it exceeds 2.9%, decisively control your position and don't resist.
Lastly, let me say something straightforward.
The current market is like "walking on a tightrope", on one side is a 91% probability of interest rate cuts and the frenzy of OKB's surge, while on the other side are the Federal Reserve's cooling signals and ETF capital outflows. Let's not be misled by short-term trends; remember: the liquidity injection in 2020 created a bull market, while interest rate hikes in 2022 led to a bear market. The Federal Reserve's stance is more important than any candlestick.
Tonight, I will be closely monitoring the latest speeches from Federal Reserve officials and will also watch the market movements of BTC and ETH in real-time (especially whether BTC can hold above $112,000). If there are any developments, I will update the fan group immediately. If you want to avoid this wave of policy risks and seize correction opportunities, just follow me—making money in crypto is not about gambling, it’s about sensing the wind!
