Author: WolfDAO
1. Core Judgment and Market Expectation Anchoring
The core contradictions in the recent macro market focus on the Federal Reserve’s “policy split” and “information vacuum” - these two factors not only cause short-term market fluctuations, but also lay the foundation for structural benefits in the long-term trend.
The macroeconomic foundation is clear: Market consensus predicts the Federal Reserve will cut interest rates by another 25 basis points at its October meeting. Powell's previously signaled "flexible dovishness" has effectively anchored expectations for a short-term rate cut, opening up room for further easing.
Direct impact on the crypto market:
Liquidity drives prices higher: Expectations of interest rate cuts have reinforced market confidence in "loose liquidity." Capital has poured into the crypto market in pursuit of high returns, pushing Bitcoin's price to a short-term high of $126,000, confirming positive market sentiment.
The value of scarcity is further consolidated: continued loose policies will dilute the purchasing power of legal tender, and Bitcoin’s long-term narrative as an inflation-resistant, non-sovereign value storage tool is strengthened - the current correlation between Bitcoin and gold is higher than that of US stocks, which is a direct reflection of this "hedge attribute".
II. Market Consolidation Amidst Policy “Information Fog”: Not a Logical Failure
The current pullback of Bitcoin from $126,000 to $121,000 and the wide fluctuation of Altcoin are essentially normal reactions of the market to digest high risks and wait for confirmation of macro data, rather than a breakdown of the previous macro logic.
3. The practical impact of policy games and market psychology
The Fed's current "policy split" and "information fog" have directly led to intensified short-term market consolidation and increased volatility. This can be broken down from two aspects:
1. Dovish consensus provides a "sentimental bottom"
Powell's flexible stance, coupled with the Fed's prevailing preference for preemptive rate cuts, has fostered market expectations for prolonged liquidity easing—the core sentiment supporting the current highs in the crypto market. As long as the Fed doesn't explicitly rule out rate cuts, market fears of a bear market will remain subdued.
2. “Information vacuum” triggers the release of risk premium
The government shutdown delayed the release of key economic data, rendering the October Federal Reserve interest rate meeting a flight in the dark. This uncertainty translates into an "excessive optimism premium" during market rallies and an "uncertainty risk premium" after sentiment cools. The current market pullback represents a temporary release of this risk premium.
IV. Market Psychological Transition and Strategic Outlook: Consolidation is a Prelude to the Next Round of Rise
The current market consolidation is essentially a natural transition of investors' psychology from "brainless optimism" to "cautious wait-and-see". It is not a trend reversal, but more likely to accumulate momentum for the next round of growth.
The key to shifting focus and confirming trends: The core focus of the market has shifted to "delayed release of key economic data" - if indicators such as employment and inflation show economic weakness after the data is released again, it will provide "factual support" for the Fed to cut interest rates. At that time, the suppressed liquidity will be released in a concentrated manner, and Bitcoin will most likely maintain strong momentum and hit new highs again.
In short, the final formation of the crypto market trend depends on the combined verification of "macro data + Federal Reserve actions".
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