Breaking news! The market expects the Federal Reserve's interest rate cut probability this year to be zero, the crypto space needs to be careful!
Recently, this news has been quite explosive!
Speaking of which, the conflict in the Middle East has caused energy prices to soar, and inflation is also taking off.
The financial market has long given up on expecting an interest rate cut by the Federal Reserve in 2026; now everyone has even abandoned the thought of betting on rate cuts. A month ago, some were betting on 2-3 rate cuts, but now it's been completely wiped out! This operation has directly hit our crypto space hard.
In terms of liquidity, high interest rates for a longer duration combined with rising inflation have tightened the purse strings for risk assets. If we want a rebound in the short term? Difficult!
Risk appetite has also decreased, and both institutions and retail investors have begun to tighten their wallets. The selling pressure on highly volatile assets in the crypto market will only increase.
Look at how Bitcoin recently broke below 66,400, and Ethereum dropped to around 1,980, which is influenced by this macro logic.
In the short term, within 1-4 weeks, the crypto space is likely to continue to oscillate weakly. If Bitcoin cannot hold 66,000 and ETH cannot hold 1,900 USD, it may even have to probe lower. In the medium term, if stagflation really occurs, Bitcoin, as an asset to hedge against inflation, may have opportunities later, but short-term beating is unavoidable.
To put it bluntly, this news is the root of the current weakness in the crypto space. But let's not panic; don't over-leverage, keep a close eye on stop losses, and don't easily go All in before the macro environment improves.
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