After the release of US employment data, market discussions about interest rate cuts in 2026 have become increasingly specific. However, the underlying investment logic remains unclear to most people.

**Where is traditional financial capital flowing?**

The era of simultaneous stock and bond declines has gradually evolved. The appeal of traditional fixed-income assets is waning, while the volatility of equity assets is rising. In this context, incremental funds will inevitably seek new destinations. As a globally liquid asset class, the cryptocurrency market is becoming a target for capital reallocation.

The issue is not about the rate cut itself, but when the market will start fully pricing in this expectation. Historical experience shows us that when a highly certain macro event gradually becomes consensus, the biggest opportunities are often already priced in.

**Hawkish vs. Dovish: What will the market experience?**

Recent Federal Reserve speeches seem more cautious. The views of new voting members may focus more on data dependence, which means that before officially starting a rate cut cycle, policymakers might signal and repeatedly test the market’s risk tolerance. In the short term, this could lead to increased volatility in risk assets, especially those with relatively weaker liquidity.

But from a longer-term perspective, an improvement in liquidity conditions is expected. The key is to survive this process.

**How should investors respond?**

First, dollar-cost averaging into Bitcoin and Ethereum is a long-term strategy that stands up to scrutiny. These two assets hold the most stable positions within the crypto ecosystem, with the most liquidity and relatively stronger risk resistance. But it’s important to avoid a common misconception—don’t put all your chips on short-term price predictions. Gradual deployment can effectively hedge against timing risks.

Second, be cautious with smaller coins. In the early stages of a rate cut cycle, market funds often flow out of high-risk assets into more stable ones. Many micro-cap coins may see declines far exceeding expectations in a liquidity-starved environment.

Third, maintaining sufficient cash positions is crucial. Before a market reversal, there are usually one or multiple panic sell-offs. Having enough firepower during these moments can turn risk into opportunity. Historically, the most opportune moments for action occur during the most pessimistic sentiments before a major rally.

**Underlying logic of market rhythm**

From a capital perspective, the turning point in global liquidity may be closer than most expect. US economic data volatility is increasing, giving policymakers more room to adjust. Once rate cut expectations shift from a probability to a certainty, the incentive for incremental funds to enter risk assets will significantly strengthen.

But before that, the market will go through a testing phase. Panic will re-emerge, and prices will test key support levels again. Investors who can maintain discipline during this phase will ultimately reap greater rewards.

**A core insight**

The most difficult part of investing is not predicting the right direction, but maintaining patience before the trend is confirmed. Even harder is acting correctly at the right time once the direction is clear. The gap between cognition and action determines most people’s final returns.

When leading indicators like US non-farm payrolls start flashing red lights, smart money is already quietly adjusting their positions. If you’re still waiting for clearer signals, you may have already missed the most critical window for deployment.

The choice now is simple: stay on the sidelines or start acting with rhythm. As long as you understand what you’re doing and why, you can navigate this phase effectively.