Night of Rate Cuts, Over 110,000 Longs "Graduate": When the Fed's Sweetness Meets Market Bitterness

Do you think rate cuts are the starting gun for a bull market? The crypto world tells you with a bloody $300 million liquidation: sometimes, eating too much sugar can give you a toothache.

In the early morning, the Federal Reserve cut interest rates as scheduled—by 25 basis points, bringing the rate down to 3.5%-3.75%. Before Powell's words even finished, Bitcoin surged to $94,500. Bulls cheered and celebrated, as if the $100,000 level was already in the bag. However, this celebration lasted only one candlestick. The plot quickly took a sharp turn: Bitcoin unexpectedly turned around and plummeted, breaking through $89,000 all the way down. 114,600 people were forcibly "graduated" in their sleep, with liquidations totaling $302 million.

This isn't a roller coaster—it's precise demolition.

"Buy the expectation, sell the reality"—a top-tier daylight conspiracy

Why did rate cuts turn out to be "bad news"? Because the market had already baked in this sugar.

Since October, this rally was fundamentally a "vote" by traders with real money on expectations of rate cuts. When good news actually materialized—without any more dovish surprises or promises of further easing—what remained was "vacuity in the sunshine." Those who had positioned early, when would they realize their profits? Now, if not then, when?

More critically, Powell played **"dovish balancing"** this time: on one side, he explicitly ruled out the possibility of rate hikes; on the other, he announced a $40 billion monthly bond purchase plan. But on the other hand, the policy statement embedded the harshest message—"future adjustments will depend on the latest data." In plain language: "I’ve given you the sweet dates, but the road ahead is up to you."

The market's infinite illusion of "ongoing easing" was thoroughly shattered at this moment.

Three adverse currents, more deadly than rate cuts

Bitcoin's plunge was not just profit-taking but a warning sign of a macro environment undergoing structural change.

First, the "hidden rate hikes" in the dot plot. Although rates remained unchanged this time, the dot plot implied only one rate cut by 2026. This means "higher for longer" is no longer a prediction but a consensus. Liquidity tap is tightening, not loosening.

Second, the "black swan wing" of the Bank of Japan. The last bastion of negative interest rates globally may turn. If Japan ends its negative rate policy, it will withdraw massive low-cost funds from the global market, causing a seismic shock to all risk assets. This is no longer a distant threat but a ticking countdown.

Third, the loosening faith in institutions. Standard Chartered's target price for Bitcoin by the end of the year was halved from $200,000 to $100,000, which is no coincidence. When leading institutions start lowering expectations, it often means the market has entered a "complex phase"—the rally ends, and divergence begins.

The market enters the "deep water zone": no more mindless euphoria

In one night, over 110,000 accounts went to zero, and $300 million evaporated. Bitcoin repeatedly oscillated at the $32 trillion market cap level but could not break through effectively. All these signals point to the same conclusion: the first phase of a bull market driven purely by liquidity has ended.

Next, the market will enter a "second phase" that tests fundamentals. Here:

• Not all coins will rise—only projects with real value capture ability will survive.

• Not every rate cut is good news—policy "expectation gaps" matter more than the policy itself.

• Not institutional bullish calls are safe— their hesitations are your early warnings.

As the tide begins to withdraw selectively, naked swimmers will inevitably surface. This Fed decision essentially tells the market: "The free lunch is over; from now on, you eat based on your ability."

Conclusion: Fasten your seatbelt; smart people never complain about road conditions

There are no gods in the crypto world—only survivors who can read signals. The cost of the 110,000 liquidations teaches us: never bet unidirectionally against macro policies.

Short-term rebounds may still occur, but long-term uncertainty has risen significantly. The upcoming trend will feature increased volatility, divergence, and stricter trading discipline.

What do you think of this abnormal "rate cut equals crash" pattern? Where do you see Bitcoin's next key support level? Under the "long-term high interest rates" environment, will you adjust your position strategy?

Follow @CryptoGoldDigger to get deep daily market signal analysis and proactive strategies. Don't forget to share with your fellow traders, and leave your thoughts in the comments—after all, in a storm of uncertainty, the most valuable skill is independent thinking.

(Investing involves risks; the above analysis is for reference only and does not constitute investment advice)