Brothers! Today the market has plummeted across the board, BTC has broken below 67000, ETH, BNB, and SOL have all dropped significantly. One of the core reasons is the heavyweight news from the Federal Reserve today. I won't waste time with official nonsense; I'll speak plainly and explain how this news affects us!
First and foremost: the expectation for a rate cut has basically cooled down, so don't expect any easing in the first half of the year.
The latest CME 'Federal Reserve Watch' data is here, with a 97.4% probability that the Federal Reserve will keep interest rates unchanged in April, basically a done deal; even in June, the probability of a rate cut is only 6.6%, while there's still a 2.4% chance of a rate hike.
We all understand that one of the core driving forces behind this market is the expectation that the Federal Reserve will cut interest rates and inject liquidity. Now, the expectation for rate cuts in the first half of the year has been completely shattered. The market has lost this biggest supportive factor, and there is fundamentally no confidence to push up in the short term. This is the core reason for today's collective capital flight and sell-off.
Then there’s the statement from Federal Reserve officials: Mainly cautious observation, and the Middle East conflict has become a sword hanging over our heads.
Today, the President of the St. Louis Federal Reserve directly stated that the current interest rates will be maintained for a while. The Federal Reserve is prepared for both 'increasing rates when they rise, and decreasing rates when they fall.' In simple terms, it means they are currently hesitant to act and will continue to observe without giving any signals of easing to the market.
Federal Reserve Governor Barr directly warned: The longer the Middle East conflict drags on, the greater the negative impact on U.S. inflation and the economy. Translated, it means: The more chaotic the Middle East → The higher oil prices → The harder it is for inflation to come down → The less the Federal Reserve dares to cut interest rates, and it may even be forced to raise them. This directly eliminates risk appetite, and the cryptocurrency market, as a high-risk asset, is the first to be abandoned by funds.
Looking at the economic data released today: Inflation persistence exceeded expectations, and the Federal Reserve has even less reason to ease.
The March data released today has poured cold water on the market: ADP employment increased by 62,000, far exceeding expectations, the salary increase for job changers rose to 6.6%, and the manufacturing PMI hit a new high since 2022, with corporate costs also soaring.
All this data is saying one thing: Inflation is not coming down as quickly as everyone thinks; it's still quite stubborn. The Federal Reserve was already hesitant to cut rates casually, and now that the data has come out, they have completely lost the reason for easing. Market expectations have cooled, and the cryptocurrency market has directly followed suit in selling off.
Finally, here's some reassurance: There’s no need to overly panic about rate hikes; Goldman Sachs says the market is overly anxious.
Goldman Sachs just released a research report today stating that the market has inflated the probability of the Federal Reserve raising interest rates this year to 45%, which is a complete overestimation of risk.
They said that the U.S. dependence on oil is no longer what it used to be, and rising oil prices are unlikely to break core inflation. Historically, fluctuations in oil prices rarely lead the Federal Reserve to raise interest rates directly, so there’s no need to scare oneself about excessive panic over rate hikes.
[Personal Opinion]
Today, the market collectively plunged, which was caused by the cooling of expectations for Federal Reserve rate cuts + geopolitical risks + hawkish economic data, three negative factors compounded. In the short term, without the favorable expectation of rate cuts, it is very difficult for the market to directly reverse in a V-shape. Be sure not to blindly catch the bottom in operations.
Focus on the critical thresholds: BTC holds at 66000, ETH holds at 2000, BNB holds at 580. As long as these core levels are not breached, there’s still a chance for stabilization; once they break, it’s likely to test lower.
Additionally, there is non-farm data tomorrow. Today, funds are reducing leverage and seeking safety, and it's better to wait until the data is released and emotions stabilize before taking action.