02:00 AM FOMC Three Market-Scenario Simulations (Gold + Big-BTC)
Scenario 1 [Mainstream Expectations: Hike by 25 bps; speech tone neutral; do not lock in a “we will keep hiking after” message] (Most likely; about 70% probability)
As soon as the decision is released: hike by 25 bps. The dot plot is nudged slightly higher.
Later, during the press conference, Waller’s remarks leave room—he doesn’t explicitly nail down another December hike.
Price action path: first a drop, then a rebound—classic “sell the fact.”
Right at the instant the 2:00 decision comes out, the US dollar surges sharply. Gold quickly sells off in a downward jab, and Big-BTC follows with a synchronized plunge.
At the 02:30 press conference, Waller’s tone isn’t as tough as everyone expects. The market reads it as bearish news already priced in.
The trend flips; price turns back to recoup lost ground. Gold rebounds after the selloff; after Big-BTC crashes, it also recovers part of its losses.
Key to watch: it’s very easy to first poke downward to sweep out a batch of stop-losses below, and then immediately reverse upward and run. The risk of sweeping stops on both sides with rapid back-and-forth moves overnight is extremely high!
Scenario 2 [More Hawkish Than Expected: Hike by 25 bps; dot plot raised; explicitly states December still leaves the possibility of further hikes] (Less likely, around 20% probability)
Not only is it a direct 25 bps hike—the dot plot also lifts the terminal rate higher. Waller’s wording is firm; he repeatedly emphasizes that inflation is still stubborn. There remains the possibility of additional hikes afterward.
Price action path: all the way down. After the drop, it keeps dropping.
The US dollar stays strong, and gold grinds lower under pressure with little room for a meaningful rebound. Big-BTC continues to weaken in line, then tries to probe new lows.
This scenario is the most comfortable for shorts: the bearishness keeps compounding, and it’s hard for the market to form a V-shaped reversal overnight.
Scenario 3 Unexpectedly More Dovish: [Hold rates steady; no hike] (Very low probability, only 10%)
This time, rates are kept unchanged. On the surface, only polite language is used to leave room for future hikes, and the dot plot remains unchanged.
Price action path: a sudden “violent” rally upward right away!
The biggest trap tonight is either: a fake fall first followed by a reversal, or a spike higher first then turning around to smash downward—back-and-forth jabs that sweep stop-losses for both longs and shorts.
Before the decision lands, never hold a full position and stubbornly “sit through it.” No matter whether you’re long or short, first reduce your position size.
From 2 to 3 o’clock, the price action is especially violent—try not to chase or kill the trade by buying highs and selling lows. After the situation becomes clear, follow the trend and you’ll feel much safer. $BTC
Scenario 1 [Mainstream Expectations: Hike by 25 bps; speech tone neutral; do not lock in a “we will keep hiking after” message] (Most likely; about 70% probability)
As soon as the decision is released: hike by 25 bps. The dot plot is nudged slightly higher.
Later, during the press conference, Waller’s remarks leave room—he doesn’t explicitly nail down another December hike.
Price action path: first a drop, then a rebound—classic “sell the fact.”
Right at the instant the 2:00 decision comes out, the US dollar surges sharply. Gold quickly sells off in a downward jab, and Big-BTC follows with a synchronized plunge.
At the 02:30 press conference, Waller’s tone isn’t as tough as everyone expects. The market reads it as bearish news already priced in.
The trend flips; price turns back to recoup lost ground. Gold rebounds after the selloff; after Big-BTC crashes, it also recovers part of its losses.
Key to watch: it’s very easy to first poke downward to sweep out a batch of stop-losses below, and then immediately reverse upward and run. The risk of sweeping stops on both sides with rapid back-and-forth moves overnight is extremely high!
Scenario 2 [More Hawkish Than Expected: Hike by 25 bps; dot plot raised; explicitly states December still leaves the possibility of further hikes] (Less likely, around 20% probability)
Not only is it a direct 25 bps hike—the dot plot also lifts the terminal rate higher. Waller’s wording is firm; he repeatedly emphasizes that inflation is still stubborn. There remains the possibility of additional hikes afterward.
Price action path: all the way down. After the drop, it keeps dropping.
The US dollar stays strong, and gold grinds lower under pressure with little room for a meaningful rebound. Big-BTC continues to weaken in line, then tries to probe new lows.
This scenario is the most comfortable for shorts: the bearishness keeps compounding, and it’s hard for the market to form a V-shaped reversal overnight.
Scenario 3 Unexpectedly More Dovish: [Hold rates steady; no hike] (Very low probability, only 10%)
This time, rates are kept unchanged. On the surface, only polite language is used to leave room for future hikes, and the dot plot remains unchanged.
Price action path: a sudden “violent” rally upward right away!
The biggest trap tonight is either: a fake fall first followed by a reversal, or a spike higher first then turning around to smash downward—back-and-forth jabs that sweep stop-losses for both longs and shorts.
Before the decision lands, never hold a full position and stubbornly “sit through it.” No matter whether you’re long or short, first reduce your position size.
From 2 to 3 o’clock, the price action is especially violent—try not to chase or kill the trade by buying highs and selling lows. After the situation becomes clear, follow the trend and you’ll feel much safer. $BTC
