The long-awaited FOMC meeting concluded, with the results far exceeding expectations of a hawkish stance, leading to a heavy blow for the market. The decision to keep interest rates unchanged met expectations, but the dot plot shifted significantly, with more than half of the officials optimistic about interest rate hikes within the year, completely changing policy expectations from rate cuts to rate increases. After Bitcoin (BTC) surged to 66,000, it quickly fell back, breaking below the 64,500 support, confirming a downward trend.

The recent rebound from 59,000 to 66,000 is merely a dead cat bounce, characterized by low volume increases and a divergence in price and volume. ETF funds have continued to flow out in the long term, with institutions using the rebound to reduce holdings, while only retail investors are stepping in to absorb the selling, and short-term bullish sentiment has been fully digested.

This was the first interest rate meeting under Chair Powell that was passed unanimously, with the statement removing all rate cut guidance, and the Chair's remarks firmly tightening the stance, prioritizing the suppression of inflation without any signals of easing. The weakening market is not just catalyzed by the decision; multiple bearish factors compounded are the root cause: the market had already priced in unchanged rates, and expectations for rate hikes came as a sudden negative surprise; the rebound itself lacked support from incremental funds, relying only on short covering and geopolitical news; the pressure from yen interest rate hikes continues to release, and on-chain market demand has significantly shrunk, with models estimating the current bottom to be around 48,000.

In the short term, there are only two weak bullish factors: ETF outflows have slightly slowed, and falling oil prices are alleviating inflationary pressures, but it is difficult to change the overall bearish pattern. Further negative factors continue to fester; expectations for interest rate hikes will suppress risk assets for a long time, and the US-Iran situation is merely a temporary ceasefire lasting 60 days, with geopolitical risks not eliminated.

The overall trend has not reversed, and 60,000 is definitely not the bottom of a bear market; it is highly probable that the next drop will test 55,000, with an ultimate target of 45,000. Currently, 64,200 is testing the critical 64,000 support; the resistance at 65,000-66,500 has turned strong. There are three potential movement scenarios: a drop below 64,000 directly testing 62,500, narrow range consolidation with a slight rebound to 66,000 facing pressure again, with the first downward path having the highest probability.

In terms of operations, remain on the sidelines and wait for clear signals before acting. If there is an effective drop below 64,000, lightly short; if there is a rebound to 65,000-65,500 with stagnation, increase positions; set a unified stop loss at 65,500, with a medium-term view targeting 60,000, 55,000, and 45,000, keeping positions controlled within 25%, and using low leverage for swing trading.

The market is primarily experiencing a downward volatility; there’s no need to chase orders, take profits at support levels during declines, and reposition at pressure levels during rebounds. Expectations for rate cuts have completely vanished; if the 64,000 level is lost, the 60,000 support will soon be breached. It is far from the time to catch the bottom; whether for BTC or ETH, patiently wait for a low bottom range, and staying hands-off to observe is also a good trading strategy.

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Disclaimer: The content is merely personal market opinion exchange and does not constitute investment advice. Cryptocurrency is highly volatile, and leveraged trading carries high risks with profits and losses borne by the individual.

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