Rate Cuts to Rescue the Market? First, Understand the Root of the Fed's Anxiety

UBS and JPMorgan have recently issued warnings simultaneously: U.S. employment data is ringing alarm bells. This is not just a sign of routine economic fluctuations but a clear signal that the Federal Reserve is proactively initiating "defensive rate cuts." When the rate cuts in Q1 next year actually materialize, will you think the bull market is as solid as a rock? Not necessarily. The real risks are accumulating in the shadows.

Rate cuts may look appealing, but they hide a "data collapse"

Persistent employment weakness, government operational hurdles, distorted survey data—these factors together reflect a crisis in the credibility of grassroots economic data in the U.S. When even the real situation is uncertain, the Fed's decisions will increasingly rely on intuition and preemptive measures. The result? Market volatility becomes unpredictable, and any subtle signs are amplified by policy sentiment.

How will the crypto market move? The battle between liquidity recovery and economic concerns

Rate cuts can indeed temporarily boost liquidity and push up mainstream assets like BTC. But you need to understand one thing: this round of rate cuts is not because the economy is booming but because the market is "panicking." Once economic weakness is further confirmed, risk assets will inevitably face revaluation. As a high-beta sector, crypto cannot escape this fate.

What should you do?

First, stop blindly rushing in. The first half of 2025 is likely to be a chaotic period where policy and fundamentals clash—going all-in now is essentially gambling.

Second, focus on safe-haven stories. If economic data continues to worsen, the "digital gold" concept of BTC might be temporarily hyped, but be wary of the chain reaction in overall market sentiment.

Most importantly, keep ample ammunition. The real opportunity appears during irrational panic-induced misjudgments—that's the golden window for your strategic deployment.

Ultimately, the more the Fed encourages caution, the more vigilant you should be. The current task is not to cheer for liquidity but to watch for cracks in the economy. A true bull market never starts amid applause; it quietly develops amid everyone's unnoticed anxiety.