Join the chat room Tonight at 10:30, Federal Reserve Chairman Powell is going to Harvard to "give a lecture." Don't be fooled by his casual words; he's talking about inflation and interest rate cuts—this is the lifeblood of the crypto world.
Old Powell is likely to continue playing Tai Chi this time, avoiding political rhetoric, but the market is not foolish. Last week, the Federal Reserve just announced to keep interest rates unchanged, and Powell clearly stated that "monetary policy is not on a fixed track," and whether to cut interest rates in the future entirely depends on the data. If he is even a bit stubborn tonight, the dollar will take off, and Bitcoin will be pressed down again.
What’s more critical is that all the data this week is "nuclear bomb level": #JOLT JOLTS job openings, #小非农 , and then Friday's unemployment rate report. The market's expectations were already chaotic, and then there was another major incident in the Middle East over the weekend—
#中东局势 Middle East conflict: Oil prices have soared, inflation cannot be suppressed.
The situation in the Middle East escalated sharply over the weekend. The Israeli Defense Forces confirmed airstrikes on Iran's heavy water reactor in Arak and uranium enrichment facilities in Yazd Province. Iran has retaliated strongly, targeting six steel plants and related industrial facilities in Israel for counter-strikes.
The U.S. is also not idle. A Defense Department official revealed that over 300 U.S. soldiers have been injured since combat actions against Iran began, with over 75% involving traumatic brain injuries. A spokesman for the Iranian Parliament's National Security Committee even stated that Iran is considering withdrawing from the Non-Proliferation Treaty.
Oil prices have already exploded—#国际油价上涨 WTI crude futures soared to $99.64 per barrel, with a daily increase of up to 5.46%; Brent crude even broke the $112 mark. Keep in mind, just two weeks ago, oil prices were hovering around $65.
What does this mean for the crypto world? Oil prices breaking $100, inflation cannot be suppressed. Even if the Fed wants to back down on rate cuts, they have to weigh their options. The current situation can be described as a vicious circle of "geopolitical conflict → oil price surge → stubborn inflation → the Fed dare not cut rates."
Employment nuclear bomb: All data is trending downwards; can rate cut expectations hold?
Don’t just focus on the Middle East; domestic U.S. data is also sending signals.
The latest ADP employment data shows only an increase of 37,000 jobs, the lowest level in over two years. Professional/business services decreased by 17,000, education/healthcare decreased by 13,000, and even trade/transport/utilities are laying off employees.
More critically, the number of people continuously claiming unemployment benefits has reached the highest level in three and a half years, nearing 2 million per week. This figure indicates that the number of unemployed is increasing, and it will be difficult to find new jobs in the short term.
On one side, the job market is cooling down, while on the other side, oil prices are soaring— the Federal Reserve is caught in the middle, in a dilemma. Goldman Sachs Asset Management has adjusted its expectations, believing that the Fed may enter a "prolonged pause period" and might only resume rate cuts later this year.
Powell's dilemma: Independence vs. political pressure
Powell's current situation is more complex than the numbers show.
Last weekend, Powell released a video statement revealing that the U.S. Department of Justice has threatened criminal prosecution regarding his testimony in Congress in June. Powell firmly stated in the statement: "Behind the threat of criminal charges is the Fed's ongoing commitment to base interest rate policy on what is 'most beneficial to the public,' rather than yielding to the President's preferences."
Meanwhile, Trump has been publicly pressuring the Fed to cut rates. Powell, in his latest press conference, rarely defended the central bank's independence, stating that it is the "cornerstone of modern democratic systems" and can prevent monetary policy from being politicized.
Translated into plain language: The White House wants me to cut rates to save the economy, but I insist on letting the data speak. The problem is that the current data itself is contradictory— employment is weakening, yet inflation is rising due to geopolitical conflicts. No matter how independent Powell is, he has to face this reality.
What impact does this have on the crypto world?
If Powell is hawkish tonight + employment data is strong = big downside. Bitcoin may retrace to 65,000 or even lower; don’t think about catching the bottom, protecting your life is the priority.
If Powell gives in + employment data collapses = violent rebound. But how likely is this? Against the backdrop of oil prices breaking $100, the Fed can't easily back down.
Notably, the recent market panic over the "threat to the Fed's independence" has instead driven safe-haven capital into gold and Bitcoin. The conflict between Powell and the Department of Justice continues to escalate, and as the neutrality of the dollar is questioned, crypto assets may become hedging tools. Presto Research's head of research, Peter Chung, pointed out that this political conflict "has raised investors' concerns about the traditionally dollar-dominated financial system."
But this is not a blind bullish reason— the escalation of geopolitical conflicts remains a key risk. CoinEx Research's chief analyst Jeff Ko warns: "Any escalation of conflict could significantly increase market volatility and drive capital into safe havens."
This week's timeline
Tuesday: Powell's speech + ISM Manufacturing PMI
Wednesday: JOLTS Job Openings Data
Thursday: ADP Non-Farm Employment Change + Non-Farm Payroll Report
Friday: U.S. Independence Day holiday, markets closed, liquidity will be very thin
What does Friday's market closure mean? All heavyweight data is crammed into the first four days, and market fluctuations will be sharply amplified. Institutions may complete adjustments on Wednesday and Thursday, making it easy for retail investors to get trapped by chasing highs.
What should we retail investors do?
Don't be stubborn! This week will be very volatile; don’t chase highs and don’t heavily bet on one direction.
Specifically:
Hold steady: Wait for Friday's non-farm data to set the direction, and don’t make moves in between.
Don’t chase highs: Bitcoin has already dropped below 66,000 in early trading, with nearly $200 million in liquidations within an hour, all from long positions— this is a bloody lesson.
Focus on support levels: 66,000 is a key psychological level; if it breaks, don’t rush to catch the bottom, wait for stabilization signals.
Personal opinion: The current situation is quite awkward. Oil prices break $100, inflation cannot be suppressed, and the Fed cannot back off; yet employment is indeed cooling down, and Trump is about to shift the blame. This feeling of tearing is reflected in the market as back-and-forth whipsaws.
At this juncture, the worst thing to do is to heavily bet on one direction. Wait for the storm to pass, and then look for opportunities to enter.
Give a follow, comment "666" in the comments section, and I’ll post specific operational ideas later!
