Staring at K-line charts all night, repeatedly studying golden crosses and death crosses, only to have all technical signals shattered by a single Federal Reserve decision. Too many people are still obsessing over technical patterns, but they don’t realize that the true lever that moves the crypto world is in the hands of the Federal Reserve.

**Liquidity is the lifeblood of the market**

The Fed’s actions directly influence the crypto market. When the Fed cut interest rates by 50 basis points in September, Bitcoin instantly surged from $60,000 to $62,000, with 24-hour liquidations reaching 38,000 traders and a $190 million loss for shorts. This is not an isolated case—every time the Fed signals easing, high-risk assets are sucked in as if by a vacuum cleaner, with capital flooding in.

Conversely, when the Fed adopts a hawkish stance and slows down rate cuts, Bitcoin can plummet over 4% in a single day, with mainstream coins like Ethereum and SOL following suit in a collective correction. This is not coincidence; it’s a pattern.

**Macro data is the script for trading**

To avoid pitfalls, learn to watch these key data points:

If the unemployment rate rises by 0.1% for several consecutive months, the Fed might be forced to accelerate rate cuts. If CPI inflation data comes in below expectations, easing expectations will be reinforced; if it exceeds expectations, market confidence will immediately collapse. If U.S. Treasury yields fall below 4%, idle funds will start flowing into risk assets. These seemingly dull economic indicators are actually trailers for crypto volatility.

**How can retail investors survive? Turn from gamblers into observers**

First, don’t stare at K-line charts until your eyes go blind. Mark the Federal Reserve meeting dates and CPI release days (usually mid-month) on your calendar. Before key data is released, keep some reserve in your positions—don’t bet your entire net worth.

Second, treat liquidity as an ally. When the rate-cut cycle arrives, it’s the springtime for risk assets; when expectations of rate hikes strengthen, it’s time to defend. Keeping pace with these shifts is more effective than any technical indicator.

Don’t go against the Fed—that’s a sure way to lose.