If the Federal Reserve cuts interest rates, how will ETH move? Old Li: 60% probability of a spike, but must be wary of a 'killing trend'!
Brothers, I am Old Li. The chart clearly states that the market predicts the Federal Reserve will cut rates from 4% to 3.75% at 3 AM. This is a big deal, but don't let a single piece of news cloud your judgment. I will break it down for you in the simplest terms: will ETH rise or fall after the rate cut, and what should we do?
Core conclusion: A rate cut itself is positive, but whether ETH rises or not depends not on this 0.25%, but on Powell's 'words' in the 30 minutes after!
1. Two scenarios for interest rate cuts determine the two fates of ETH
Scenario one: Good news lands, trend rises (probability 60%).
Conditions: The Federal Reserve announces a 25 basis point rate cut, while Chairman Powell releases a 'dovish' signal in his speech at 3:30 AM (for example, suggesting that inflation is controllable and that further easing may continue in the future).
Market logic: This is 'real good news'. The market sees a clear signal of a shift in monetary policy, expectations of improved global liquidity increase, and risk assets gain support.
Impact on ETH: It is highly likely to rise due to the momentum. From a technical perspective, strong resistance is in the $3400-$3450 range. If it breaks through with strong volume, the short-term trend will be greatly reinforced.
Scenario two: Good news is fully priced in, reversal to decline (probability 40%).
Conditions: A 25 basis point rate cut meets expectations, but Powell's speech is unusually 'hawkish' (for example, emphasizing that the fight against inflation is not over, implying this is a 'one-time' rate cut with no further cuts considered within the year).
Market logic: This is classic 'buy the expectation, sell the fact'. The benefits of a rate cut have long been digested by the market; when expectations are realized and there is no more room for imagination, profit-taking will surge, leading to a decline.
Impact on ETH: It is likely to open high and close low or drop directly. The key defensive level to watch is the breakout support level of $3250-$3280; if it breaks below, it may retest $3200 or even lower to find support.
Two, Old Li's practical strategy: What do we do tonight?
Remember, we are not gamblers; we are traders. Our goal is to avoid uncertainty and embrace certainty.
Before the decision (now - 3 AM): clear the field and wait, absolutely do not open new positions.
Close out high-leverage contracts and clean up unnecessary altcoin positions.
Core action: Hold a sufficient proportion of cash (USDT) to keep yourself in the most flexible and proactive position. Tonight, cash is oxygen.
When the decision is announced (3 AM): Just look at the numbers, do not take action.
A 3.75% rate cut is the baseline expectation, without any suspense. The instant surge and drop at the announcement of this number is likely a trap; do not chase.
When Powell speaks (starting at 3:30 AM): perk up your ears and keep a close eye on the charts.
This is the real decisive moment. Open the 5-minute or 15-minute K-line chart of ETH.
If the price breaks through key resistance (like 3350) with strong volume, and the rhetoric is dovish, consider lightly entering on the first retest confirmation.
If the price surges and then quickly retreats, breaking below the intraday moving average, and the rhetoric is hawkish, don't think about anything, just continue watching and wait for the trend to clarify tomorrow.
After the decision (tomorrow morning): Execute two plans based on the results.
If it strengthens: Pay attention to the 3400-3450 resistance zone. If it meets resistance, consider taking partial profits; if it falls back to the 3280-3300 support zone and stabilizes, it can be seen as a second buying point.
If it weakens: Breaking below 3250 indicates a dangerous trend, do not bottom fish. The potential support areas to observe are below 3200 and 3150.
Three, important reminder: Don't become a victim of 'news'.
The market is always right: Do not use your imagination to stubbornly oppose the market's real trend. Even if there is a rate cut, if the market drops, it drops; immediately acknowledge the mistake and adjust the strategy.
Position size is a lifeline: In event-driven markets, volatility will be amplified several times. Even when trading, the position size must be half or even lower than usual.
Related markets: Keep an eye on the US stock market (especially Nasdaq futures) and the US dollar index (DXY) for immediate reactions; they will provide you with clearer signals of global capital flows.
Brothers, let the chart speak. A rate cut is a clear signal. But how to play it depends on the dealer (Powell)'s next move. For us retail investors, do not bet on direction, just follow.
Remember tonight's agenda: before 3 AM, consolidate positions and stock up on ammunition; after 3 AM, let the news fly for a while and let the market choose a direction; once the direction is clear, we will mobilize. In the crypto sphere, the core principle of longevity is: when the cannon fire is intense, hide in the trenches and wait for the smoke to clear before going out to harvest the battlefield.
