Federal Reserve January Rate Decision Preview: Cryptocurrency Market Fluctuations Under the Game of Rate Cut Signals

At 3:00 AM Beijing time on January 29, the Federal Reserve will officially announce its first interest rate decision for 2026. The market currently has a consensus expectation of "maintaining the current interest rate level." The core contradiction of this decision will focus on Fed Chair Powell's press conference speech—his assessment of inflation trends and statements on the timing of rate cuts will directly influence risk asset sentiment, thereby triggering directional volatility in the cryptocurrency market.

1. Key Highlights of the Decision: Triple Signals in the Pace of Rate Cuts

1. Hawkish Scenario (Bearish Dominance): If Powell continues to emphasize that inflation remains sticky beyond expectations and that the labor market's resilience supports prices, or explicitly delays the rate cut start window (e.g., hinting at considering a cut only after June), it indicates that the Fed's monetary policy will extend its tightening cycle. This stance will directly suppress risk appetite for risk assets like Bitcoin (BTC) and Ethereum (ETH), which are highly volatile. They are likely to face profit-taking-driven declines, with Bitcoin's key support at $87,500. If this level is broken, further correction may be triggered.

2. Dovish Scenario (Bullish Drive): If Powell signals that "inflation is falling as expected" or that "a rate cut in March is feasible," breaking market concerns about policy uncertainty, risk asset sentiment could quickly heat up. The cryptocurrency market would benefit directly from the easing liquidity expectations, with Bitcoin potentially breaking out of previous consolidation ranges and challenging resistance at $89,000–$90,000. Mainstream coins like Ethereum may follow Bitcoin in a correlated upward trend.

3. Neutral Scenario (Continued Volatility): If Powell maintains the current policy stance without reinforcing hawkish signals or providing clear guidance on rate cuts, merely emphasizing "data-dependent decision-making," the market is likely to maintain its current expectations. Bitcoin and Ethereum are expected to continue recent sideways trading, with bulls and bears engaging near key levels, awaiting more explicit policy signals.

2. Trading Strategy Recommendations: Respect Volatility, Follow the Trend

Given that the core variable of this decision centers on Powell's language and its marginal changes, short-term market volatility may intensify. It is advisable for traders to adopt a "defend first, attack later" approach:

• Before the announcement: Proactively reduce leverage positions, avoid blindly chasing longs or shorts, and stay on the sidelines. Keep sufficient funds to respond to potential volatility.

• After the announcement: Focus on clear policy signals. If hawkish or dovish guidance appears, follow the trend to position accordingly. Avoid contrarian trades.

• Risk Control: Regardless of market direction, strictly set take-profit and stop-loss levels. Pay particular attention to the validity of breaks at Bitcoin's support at $87,500 and resistance at $89,000 to prevent large losses from extreme volatility.

Overall, the core of this Fed decision is the "re-pricing of rate cut expectations." As a liquidity-sensitive sector, the cryptocurrency market will directly reflect marginal changes in policy signals. Investors should focus on key statements from Powell, make rational judgments on market direction, and, while managing risks, seize potential trading opportunities. $BTC $ETH #内容挖矿焕新公测开启