In the midst of strategizing, we can win from a thousand miles away. Hello everyone, I am Lin Chao, a global financial market observer, focusing on cryptocurrency market analysis, bringing you the most in-depth trading information analysis and technical teaching.

As the year-end countdown begins, many fans have messaged asking if there are still opportunities in the market at the end of the year. If next year is likely to be a bull market, is it a bit early to enter the market now? When should one choose to enter the market to minimize risk?

Lin Chao believes that the market in December is likely to experience increased volatility around mid-month. Do you remember the evening of November 21? The speeches of two important figures from the Federal Reserve directly caused the market's expectations for a rate cut in December to make a 180-degree turn. However, since then, the expectations for a rate cut have been rising, driving a wave of easing trades that continued until early December.

So, what key data should we focus on now? ISM (Manufacturing), ADP (Employment), and September PCE (Inflation data).

The manufacturing data is not expected to bring any surprises and is likely to remain below the line of prosperity. Of course, if it unexpectedly rises above 50, it would indicate that the manufacturing sector is starting to expand, possibly reflecting the effects of industrial relocation. This would be positive for the U.S. stock market, but could put pressure on the cryptocurrency market—because if the economy is too good, rate cuts may need to be slowed down.

As for ADP (Employment), as long as it is not exceptionally strong, it will generally be categorized under "weak labor market."

Regarding the September PCE (Inflation data), considering that recent CPI and PPI have been relatively soft, and tariffs do not seem to have pushed inflation too high, this data is also expected to be moderate. As long as core inflation data does not rebound, the Federal Reserve is likely to feel that the downward trend in inflation has been "reestablished."

Overall, before the interest rate meeting, these data do not need to be very poor; as long as they are "not strong," the market is likely to price in a 90% to even 100% probability of a rate cut in December. At this point, the key will be how much the market has already factored in the expectations for a rate cut.

So why do we say that significant volatility will occur in mid-December? Because the closer we get to the interest rate meeting, the more the market will start to ponder the following issues: If the Federal Reserve really cuts rates, how "hawkish" will their stance be? How will the dot plot change? Will they announce an expansion of asset purchases? All of these will trigger speculation and trading. After the interest rate meeting, there will soon be fresh data on November inflation and non-farm payrolls. This data will directly inform the market whether inflation is truly declining, which will determine the pace of rate cuts next year. The congressional negotiations over healthcare bill subsidies may escalate again in mid-December. This concerns whether government funding can be smoothly renewed after the end of January next year. If the market feels that the risk of a government shutdown has basically disappeared, then the entire expectation will need to be adjusted.

Therefore, it is likely that from mid-December onwards, the market will not settle down. As we approach late December, the market may face a new focus: the selection of the new Federal Reserve chair. Will Trump choose someone who completely follows his orders, or a relatively neutral but actually dovish person? No one can say for sure right now. But it is certain that the new chair's background, stance, and past statements will be analyzed under a microscope by the market. This also means that Powell's influence on the market will gradually weaken.

Lin Chao's Summary

The cryptocurrency market has long been sensitive to liquidity expectations and has higher volatility than the U.S. stock market.

Previously, due to the government shutdown, many data could not be compiled, so the December meeting will actually have more data references compared to previous meetings. If the December economic data (inflation, non-farm payrolls) is weak, the market's expectations for a rate cut may further heat up, and expectations for liquidity easing will boost risk assets, potentially causing the cryptocurrency market to follow the U.S. stock market upward. However, after three months of decline, market activity has currently dropped to a freezing point, which is why even if a rate cut stimulus occurs, the market may not see much of a rebound. Especially the enthusiasm of retail investors has basically completely dissipated. We can also see from the cryptocurrency derivatives market (contract market) that the current leverage is very low. This is why Lin Chao repeatedly reminded everyone in previous articles that now is actually a good opportunity to position in spot trading. In summary, now is the time when others are fearful, and I am greedy.

From a technical indicator perspective, taking BTC as an example, the current market is actually entering a period of alternating wide and narrow fluctuations. This period is not suitable for contract trading, as it will repeatedly tug at traders' emotions; it is better to directly buy spot and wait for policy guidance after the beginning of next year for medium to long-term investment positioning. There is no need to consider too much market noise; how the market moves is not something we can control. What we can always control is the chips in our hands and the tools we use to exchange chips for cash. Maintain inner peace, do the right things, and do things right. Let’s encourage each other.

If you are feeling lost—don’t understand the technology, don’t know how to read the market, don’t know when to enter, don’t know how to stop loss, don’t understand take profit, randomly increase positions, get stuck while trying to catch the bottom, can’t hold onto profits, miss market opportunities… these are common problems for retail investors. Lin Chao can help you establish the correct trading mindset. A single profitable trade is worth more than a thousand words, and finding the right direction is better than repeatedly failing. Instead of frequent operations, it is better to strike precisely, making each trade more valuable.

The success of investment depends not only on choosing good targets but also on when to buy and sell. Protecting the principal and making good asset allocation is essential for steady progress in the ocean of investment. Life is like a long river flowing into the sea; what determines victory or defeat is never the gains and losses of a single pass or moment, but rather planning before action and knowing when to stop to gain.

The global market is ever-changing, and the world is a whole. Follow Lin Chao to gain a top-tier global financial perspective.

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