“. When I opened the market software, not only were the mainstream cryptocurrencies all in the green, but even the Asian stock market collectively 'plunged' on Friday. The knife hidden in this wave of excitement is indeed deep. As someone who has been watching the crypto market for 8 years, let's not beat around the bush today; this wave of volatility is not accidental, it's all orchestrated by the Federal Reserve behind the scenes. Newbies, don't panic, the essentials are all here.
First, let's zoom out; the crypto market has never been an isolated 'lawless land.' A single glance from the Federal Reserve can shift global funds in a new direction. A few days ago, when the 'private employment data' from the U.S. came out, it was like pouring a bucket of cold water on the market— the numbers didn't meet expectations, and everyone was already on edge. As for the Federal Reserve officials, instead of saying a reassuring word, they collectively kept mentioning 'inflation' as if it were a divine decree.
That guy Harmack from the Cleveland Fed directly stated, 'The inflation risk is more deadly than the difficulty of finding a job'; Goolsbee from the Chicago Fed was even more blunt, using 'government shutdown lacks data' as an excuse, implying that the idea of interest rate cuts is out of the question. To be honest, I am very familiar with this operation: employment data goes down, the stock market and cryptocurrencies drop together, while the Federal Reserve is fixated on inflation. Essentially, they have two thoughts: first, to protect their 'golden reputation'. If inflation rebounds, their decades of credibility will be shattered, and as for whether the market rises or falls, that is not currently a priority for them; second, to give the market a 'lesson'. In the previous half year, everyone was crazily spreading rumors about interest rate cuts, driving down U.S. Treasury yields and causing the stock market and cryptocurrencies to rise together. In the eyes of the Federal Reserve, this is 'preemptive partying'. Now they must pour cold water to wake everyone up: interest rate cuts? Not so fast!
Newbies are bound to ask, 'Can the Federal Reserve manage everything, even my crypto wallet?' Yes, they can. Capital seeks profit, and when the Federal Reserve suppresses interest rate cut expectations, it means the cost of holding assets won't decrease. Those hot funds that rushed into the crypto market will hesitate; once they hesitate, the market will naturally shake. But this isn't doomsday for newbies; rather, it's a good opportunity to practice. Remember these three points; they are 100 times more useful than blindly trying to catch the bottom.
First, don't be an 'emotional echo machine'; the louder the excitement, the bigger the pitfall. In the past two months, when the market spread rumors about interest rate cuts, how many people shouted 'I'm all in', only to find themselves down by over ten points now? The crypto market is not lacking in followers; when prices rise, they shout 'the bull market is here', and when they fall, they cry 'it's going to zero'. All these people's operations are driven by emotions. I've seen the most stable beginners who didn't move at all during last year's bear market; when others were panicking at the beginning of this year, he only entered 30% of his position, and now he's even making a profit. Remember: the hotter the market, the more you should engrave the words 'stop greed' on your forehead.
Second, paying attention to what the Federal Reserve says is more useful than watching K-lines. Newbies love to focus on intraday charts, getting excited with every little rise and panicking with every little drop, forgetting that major trends are 'policy-driven'. The speeches of Federal Reserve officials, inflation data, and employment reports are what really determine the direction of capital flow. I spend 20 minutes every day checking the latest developments from the Federal Reserve, not to understand the professional jargon, but to gauge the direction. As long as they continue to mention 'inflation', it indicates that money won't loosen easily, and the crypto market is likely to be in a volatile state—don’t expect to double your money overnight.
Third, weld your 'stop-loss line' into your wallet and don’t gamble with the market's temper. Yesterday, a newbie told me, 'I just don't believe it can keep falling; I'll hold on,' and ended up getting liquidated in the early morning. When I first started with crypto, I made the same mistake: I went all in and when it dropped 10 points, I was too reluctant to cut losses, eventually losing 80% before I exited. Later, I set rules for myself: no single investment should exceed 5% of the principal, set the stop-loss line at 8%, and walk away when it hits the limit without hesitation. Newbies must remember that in this market, staying alive is more important than making quick money; keeping the principal is what gives you a chance to turn things around next time.
In fact, this wave of 'cold water' from the Federal Reserve isn't a bad thing; it has filtered out those who want to make money by luck, leaving behind those willing to settle down and learn. The crypto market has never been a casino, but rather a battlefield that requires an understanding of macroeconomics, logic, and risk.
Follow me, Yangyang, and we will always open the door to wealth.
