Fed policy stabilizes, Bitcoin may迎来Rebound opportunity

The Fed's latest monetary policy meeting decided to keep the federal funds rate target range unchanged at 4.25%-4.50%, in line with market expectations. Although the rate was not adjusted, the policy wording, economic forecasts, and interest rate path guidance all released signals of easing, having a profound impact on the market.

1. Interpretation of the Fed's Monetary Policy Meeting

1.1 Core content of the resolution: Maintain a prudent policy, release easing signals.

The Fed has kept the benchmark interest rate unchanged, but the wording has softened compared to the past, no longer emphasizing "the need for a longer period of restrictive policies." Economic forecasts have slightly lowered GDP growth expectations and raised inflation expectations, reflecting a cautious attitude toward the economic situation.

The pace of balance sheet reduction has decreased from $60 billion to $50 billion per month, signaling that the liquidity tightening cycle may slow down. The dot plot indicates at least two rate cuts in 2025, but there are internal disagreements regarding the timing of these cuts.

Overall, the Fed has released a series of easing signals: softened wording, slowed balance sheet reduction, lowered economic growth expectations, and the dot plot indicating a rate cut path. These factors have led the market to begin reassessing the future monetary policy environment.

1.2 Direct impact on the market: liquidity turning point is approaching, risk assets are迎来转机

The US dollar index has significantly retreated, marking the largest single-day decline since 2023. US Treasury yields have decreased, with the 10-year Treasury yield falling from 4.3% to 4.1%. US stocks, especially technology and growth stocks, are experiencing a strong rebound, with the Nasdaq index soaring over 2%.

The crypto market reacted quickly, with Bitcoin's price rising more than 5% in the short term, breaking through the key resistance level of $85,000. Major coins like Ethereum also saw a simultaneous increase, reflecting the market's expectations for easing liquidity are strengthening.

Overall, the weakening of the dollar, the decline in U.S. Treasury yields, the rise in technology stocks, and the rebound of Bitcoin all indicate that the market is adjusting its expectations for liquidity. This suggests that the liquidity turning point may be approaching, and high-risk assets such as Bitcoin may welcome a new round of upward cycle.

2. Market Macroeconomic Background: The Liquidity Turning Point Has Arrived

2.1 Recent Liquidity Environment Analysis: The market funding inflection point has appeared

The pace of global liquidity tightening is slowing down. The correlation between U.S. stocks and the crypto market is increasing, and the crypto market is becoming more sensitive to changes in macro liquidity. Investor risk aversion is rising, but the market structure remains healthy.

The total balance of the stablecoin market has increased to 229 billion USD, indicating that off-exchange funds are accumulating, waiting to enter. The total balance of USDT and USDC continues to grow, showing that a large amount of funds are on the sidelines. Once the market trend is determined, these funds may quickly flow back into Bitcoin and other crypto assets.

2.2 The relationship between dollar liquidity and the crypto market

Historical data shows that the tightness or looseness of US dollar liquidity is highly correlated with Bitcoin market performance:

• 2017-2021: Loose monetary policy drove the BTC bull market
• 2022-2023: Tightening policies led to a significant drop in BTC
• 2024-2025: The tapering slows down, BTC welcomes a rebound

Currently, the Fed is at a critical stage of policy shift. Signals such as the slowdown of balance sheet reduction, a decline in the dollar index, and an increase in stablecoin balances all indicate that a liquidity turning point has emerged. If the Fed continues to release easing signals in the coming months, the crypto market is expected to attract more capital back.

3. Bitcoin Market Outlook

3.1 Short-term Price Trend Analysis: Bottoming Signals Strengthen

• Key support levels of $76,000-$80,000 form the market bottom.
• RSI indicator rebounds, market momentum recovers
• Trading volume gradually expands, market liquidity warms up

If the Fed maintains the current monetary policy and market liquidity further improves, Bitcoin may maintain a fluctuating bottom structure in the short term and迎来 a rebound market in the second quarter.

3.2 Institutional Investor Trends: Capital Inflows Strengthen Market Support

• The Grayscale fund's BTC holdings remain stable, with no large-scale sell-offs.
• Bitcoin spot ETF funds continue to flow in, institutions are increasing their holdings of BTC.
• MicroStrategy continues to increase its BTC holdings, institutions maintain confidence in long-term value.

Institutional investors' funds continue to flow in, providing strong medium to long-term support for BTC prices and enhancing the market's rebound momentum.

3.3 Possible Market Risks

• Fed policy uncertainty: If inflation data rebounds, it may delay interest rate cuts or even further tighten liquidity.
• Geopolitical risk: may affect investors' risk appetite
• Internal liquidity risks in the crypto market: exchange liquidation risks, large institutional sell-offs, etc.

4. Investment Strategy and Conclusion

4.1 Strategies Suggestions for Different Investors

Short-term traders:

• Focus on the $80,000 support level. If it is broken, consider stopping loss.
• Wait to add positions after breaking through and confirming the $88,000 area.
• Strictly set stop-loss points and closely monitor macroeconomic events.

Medium to long-term investors:

• Accumulate positions in batches within the range of $83,000-$88,000.
• Pay attention to the long-term trends of Bitcoin and changes in market sentiment.
• Avoid being affected by the violent fluctuations of short-term market sentiment.

Institutional Investors:

• Closely monitor the changes in Fed policy, especially signals of monetary easing.
• Consider holding Bitcoin and Ethereum for the long term to hedge against the devaluation risk of the dollar.
• Avoid potential risks of traditional financial assets by holding cryptocurrencies.

4.2 Future Market Outlook

• The outlook for improved market liquidity is clear, which is expected to drive funds into risk assets.
• Bitcoin may break through the target range of 85,000-88,000 USD, entering a new round of upward cycle.
• Remain vigilant about the risks posed by the Fed's policy adjustments and changes in the global economy.

Overall, under the backdrop of the Fed's policy stabilization and the gradual improvement of the liquidity environment, the Bitcoin market shows a relatively optimistic outlook. However, market volatility remains significant, and investors should make reasonable asset allocations based on their own risk tolerance and market trends.