> The countdown to the Federal Reserve's interest rate decision is in its final stages, and the market will face three entirely different scenarios. Regardless of the outcome, I maintain a bearish view on ETH for one reason: the U.S. economy is really too poor.

At 2 AM Beijing time tonight, the Federal Reserve will announce the latest interest rate decision. The market expects a 25 basis points rate cut with a probability as high as 96.4%, but this does not mean that the market will rise. According to my analysis, three completely different scenarios may occur tonight:

Scenario One: Rate cut of 25% (Probability 96.4%)

Positive news lands, altcoins crash

This is the most likely scenario, but also the most dangerous one. The market has already priced in a 25 basis points rate cut, and once it happens, it will be a classic "buy the expectation, sell the fact" situation. The futures market will face large-scale liquidations, especially in highly leveraged long positions.

Script two: Interest rate cut of 50% (probability 3.6%)

A major collapse after a brief carnival

If the Federal Reserve unexpectedly cuts interest rates by 50 basis points, the market will surge by 10% first, and altcoins will collectively rally. However, this will lead to more serious consequences: the market will interpret it as worse economic conditions than imagined, intensifying recession expectations. Subsequently, there will be a sharper decline, transitioning from a downward trend to a bear market.

Script three: Maintain interest rates (very low probability)

Black swan event, plunging 50%

If the Federal Reserve unexpectedly maintains interest rates, it will trigger a market shock. This means there might be another significant event occurring, possibly extreme deterioration of economic data or other black swan events. A panic sell-off in the market, with a drop of 50%, is not impossible.

Why do I insist on being bearish?

There are only two reasons for interest rate cuts: one is that the economy is doing well, and the country is rich and strong; the other is that the economy is too poor and needs stimulation. The current situation clearly belongs to the latter.

U.S. economic data has shown obvious signs of weakness: the consumer confidence index continues to decline, the job market has begun to show signs of loosening, manufacturing data is below expectations, and real estate sales have significantly slowed.

In this economic environment, any interest rate cut is a forced choice, not a sign of economic improvement. ETH, as a representative of risk assets, will be the first to be impacted.

More importantly, ETH's recent performance has clearly lagged behind the market:

Funds continue to flow out of DeFi protocols, NFT market transaction volume is shrinking, Layer 2 competition is intensifying, ecological diversion, and institutional funds prefer Bitcoin more.

Investment advice: Safety first

At this critical moment, I advise investors:

1. Reduce leverage to avoid being liquidated tonight, it is best to prepare (long and short positions)

2. Reduce altcoin positions, especially overvalued DeFi tokens

3. Maintain sufficient stablecoins and wait for better entry opportunities

4. Focus on Bitcoin, which is relatively more resistant to declines

Remember: as long as you are alive, you have the chance to see the sun tomorrow. In such a volatile market, protecting your principal is more important than pursuing profits.

What kind of script do you think will be played out tonight? Feel free to share your views in the comments!

The market has risks, and investments should be cautious. The content of this article is for reference only and does not constitute any investment advice.