In a normal year, December is usually garbage time, but this year is different,
According to the latest official announcement from the U.S. government, affected by the previous six-week government shutdown,
The employment and inflation data originally scheduled for release at the beginning of the month has been forced to be postponed to the middle of the month.
This has led to an extremely rare and dangerous situation,
December 11 (Thursday) morning, the Federal Reserve must hold the FOMC meeting without seeing the latest data, while all the significant data will erupt within a week after the Federal Reserve's meeting.
This meeting is extremely dangerous for the crypto market. In the past, the Federal Reserve had already received the non-farm and CPI data before the meeting, allowing for open-book problem-solving. However, this time, due to the delay in data from the shutdown, the entire Federal Reserve is taking a closed-book exam based on intuition and experience. Powell and other officials must decide on the 2026 interest rate policy without seeing the latest core data.
The reversal of the decision-making process will rapidly increase the probability of misjudgment by the Federal Reserve, such as if they believe the economy is very poor and cut interest rates, and then a week later the data shows the economy is doing well, making this interest rate cut a mistake.
This order of decision-making puts the entire cryptocurrency market at risk of dual liquidation, as the market will experience two drastic pricing corrections within just one week, making it prone to collapse.
The first pricing correction is on December 10, and the market will trade based on the Federal Reserve's blind guess resolution. For example, as mentioned earlier, if the Federal Reserve cuts interest rates and takes a dovish stance, the cryptocurrency market will surge.
As a result, when the real data is released on December 16, it contradicts the Federal Reserve's judgment from a few days prior, with the data being bearish. Due to previous excessive optimism, after the second pricing correction, there will be a more severe withdrawal and stampede than usual.
Meanwhile, without data support, the dot plot drawn by Federal Reserve officials may be severely disconnected from reality.
If this inherently inaccurate dot plot guides the market's expectations for an entire year, once it is corrected later, the market's trust in the Federal Reserve will decline, leading to capital fleeing to safe havens.
The data released on December 16 must be just right; if the data collapses, it will lead to recession sentiment in the market, causing panic over an economic collapse. If the data is very strong, it will lead to inflation sentiment in the market, with expectations for interest rate cuts decreasing, which remains bearish.
The last important time node is December 18, when the U.S. CPI, European Central Bank, and Bank of Japan's monetary policy meetings all take place on this day, likely continuing the market sentiment from December 16 and amplifying it.
The volatility in December is likely to exceed people's expectations; therefore, without a clear directional trend, contracts and leverage are very risky behaviors.
