1. Rate cut signals are as unclear as flowers in the fog; last year's salary increase was a sure thing, but this year hangs in the balance.
In Timiraos' article, comparing Powell's speeches over the past two years reveals a stark difference that makes one question life. Last year's Jackson Hole meeting, Powell stated firmly: "It's time for policy adjustments, and the direction is clear!" The market instantly understood; this was the rhythm of loosening monetary policy! The crypto space erupted, with BTC skyrocketing from 19,000 to 69,000 like a rocket, and ETH surged from 1200 to 4800. At that time, as long as you dared to enter the market and bought any mainstream currency, you could lie back and make money. Newcomers in the group were flaunting their profits until their hands were sore.
Looking back at this year, Powell's statements have been so vague: "The balance of risks seems to be shifting, and policy adjustments may be needed." What does "may" mean? How much adjustment, when to adjust, and for how long are all unknowns, as soft as cotton. To put it bluntly, the Federal Reserve is still feeling its way across the river, taking it step by step, with no certainty at all. It feels like last year when the boss confidently told you: "Starting next month, your salary will increase by 2000 every month, I've even drafted the contract for you, just focus on your work!" This year, it has turned into: "Maybe there will be a salary increase next month, but it depends on the company's performance and your performance, we'll need to study it further." With even the Federal Reserve uncertain, how can the market dare to act rashly and invest real money? My friend Wu, who works in an institution, after watching Powell's speech yesterday, not only didn't chase the high, but instead decisively reduced his position by 30%. He chuckled and said: "Last year was a clear rate cut, you could make money with your eyes closed; what about this year? It’s like Schrödinger's adjustment, entering the market now is no different from betting with your eyes closed, I can't take that risk!
2. Internal disagreements within the Federal Reserve, the path to rate cuts is fraught with obstacles, inflation data becomes the key "life-and-death test".
Worse still, Timiraos' article revealed a shocking piece of news: there is a fierce internal dispute within the Federal Reserve, and it's a chaotic mess! Three big names have come out clearly opposing rate cuts, including Cleveland Fed President Harker and St. Louis Fed President Bullard, both of whom are core members. If they are resolutely against it, even if there is a rate cut in September, it is likely to be a one-time "holiday bonus" and not the "rate cut cycle" that everyone is hoping for to kick off a new bull market. It's like eagerly anticipating a salary raise from your boss to improve your life, only to receive a single Mid-Autumn Festival bonus in the end—briefly happy but ultimately disappointing, with nothing more to follow.
Next Friday (August 30) is crucial, as the core PCE data for July, which the Federal Reserve values the most, is about to be released. The market expectations are not optimistic, with predictions of rising to 2.9%, which would be the highest in six months! If the data really is this high, forget about rate cuts; if the Federal Reserve doesn't raise rates in response, that would be considered giving the market some face. I was severely caught off guard by this data back in 2018; at that time, the Federal Reserve hinted they might pause rate hikes. I got overly excited and heavily invested in ETH at 800 dollars, eagerly waiting to make a big profit. But when the inflation data was released, it far exceeded expectations, and the Federal Reserve immediately changed its stance, announcing "continued rate hikes." The price of ETH plummeted like a kite with a broken string, crashing from 800 dollars to 100 dollars. I ended up losing nearly 100,000 U dollars, my heart was bleeding, and I almost deleted my trading software in frustration. Looking back now, I still feel a chill down my spine and break out in a cold sweat. In the eyes of the Federal Reserve, inflation is like a "favorite child," its status is 100 times more important than market fluctuations. We must never go against it in the crypto space, or we won’t even know how we ended up losing!
3. A heartfelt piece of advice for crypto enthusiasts: stay alert and respond rationally to market uncertainties.
The current cryptocurrency market is like dancing on a tightrope; as soon as there is a slight breeze from the Federal Reserve, the crypto market has to follow suit with significant fluctuations. Whether you entered the market yesterday at a high price and are now feeling anxious, or you’ve been holding back and haven't found the right timing to enter, these three sentences must be etched in your mind to remind yourself at all times.
For those chasing highs, quickly set stop-losses; don’t wait until you’re deeply trapped and in tears: if you chased ETH at above 4800, don’t hold any illusions that the price will rebound; set a stop-loss immediately! If ETH falls below 4680 dollars, don’t hesitate, reduce your position decisively; if BTC falls below 115,000 dollars, clear out and leave. These two prices are short-term lifelines; once breached, it means a complete shift in market sentiment, leading to a collapse of bulls. Holding on will only incur more losses, and by then, you won’t even have a place to cry. Yesterday, I earnestly advised a fan in the group: "Don’t operate with a full position, quickly set a stop-loss; preserving your capital is the most important thing." He didn’t listen, and today he came to me crying, already at a floating loss of 2000 U dollars, regretting not listening to me and lamenting, "If I had known, I would have listened to you." In the crypto space, stop-losses are always the first line of defense to protect yourself and are much more reliable than blindly waiting for a rebound.
For those yet to enter the market, don’t rush to buy the dip; wait for clear signals before acting: the current market environment is definitely not a good time to buy the dip. The Federal Reserve's stance is ambiguous, and next week’s inflation data is still uncertain; any rebound in the market at this time is likely a "trap to lure buyers," specifically targeting those eager to buy the dip. The most prudent approach is to patiently wait, either for data to clearly show the Federal Reserve is going to cut rates and the market trend is completely clear, or to wait until ETH drops below 4500 dollars to find a clear support level before taking action. It's better to earn a little less than to risk losing your capital. Veteran player Zheng, who has been in the crypto space for many years, is currently holding 100,000 U dollars and has been watching from the sidelines: "In 2022, rates were raised; in 2023, rates were cut. I always wait for clear signals before entering the market during big movements. Although I didn’t catch the lowest point, I have never lost a lot of money. In the crypto space, we earn stable and certain money, not by gambling blindly."
Remember, the Federal Reserve's influence is far more decisive than K-lines: Brothers, stop fixating on K-line charts, solely focusing on support and resistance levels. In the current market, every move, every word, and every piece of data from the Federal Reserve can be as powerful as 100 K-lines. Looking back at 2020, the Federal Reserve's monetary easing directly created a bull market, with prices soaring; in 2022, rate hikes sent the crypto market into a deep winter, ushering in a bear market; in 2023, the pause in rate hikes allowed ETH to rise from 1500 to 2400. Whether the crypto space can welcome a new bull market this year entirely depends on the Federal Reserve's demeanor. During this time, everyone should pay more attention to the movements of the U.S. stock market and the speeches of Federal Reserve officials. Once the wind changes, quickly adjust your strategy; don’t wait until the market has already plummeted and then say, "If I had known..."
In the crypto space, information and experience are treasures that help us make money and avoid pitfalls. If you don’t have a reliable circle and can’t obtain first-hand information from the crypto space, quickly click on the profile and follow me. I share practical experience every day, helping you interpret real market conditions, ensuring you take fewer detours and earn real money!
