The Federal Reserve has recently been embroiled in internal conflicts, causing a stir in the financial world! On one side, hawks are calling for "a rate cut of over 100 basis points," while on the other side, doves counter that "the risk of overheating the economy has not been eliminated." This hawk-dove battle directly impacts the survival of the crypto market.

The Fed is now divided into three main camps exchanging barbs. Led by Balkin, the dovish faction insists "stay calm, no rush," believing that interest rates are already in a neutral zone, and the key is the employment report this Friday, fearing that if consumption cools, the economy could collapse. Opposing them are the doves like Milan, who are aggressively pushing back, claiming current policies are "severely stifling growth," and insisting on pushing the rate cut above 100 basis points. Meanwhile, the stubborn hawks are guarding inflation, fearing that too rapid a loosening could undo previous gains.

Where is the problem? After the rate cut in December, the market was completely confused about the policy direction for 2026. According to CME data, the market's expectation for the next rate cut has fallen to just 30%—which is basically saying, "I have no idea what will happen."

How damaging is this uncertainty to the crypto space? Look at history: due to the previous cycle of rate cut expectations, BTC's price was halved within a month, dropping 30%, directly causing over 270,000 liquidations and losses totaling $980 million. Now institutional investors are also starting to fear. Standard Chartered has cut its 2026 BTC target price from $300,000 to $150,000, a 50% cut.

Two futures lie ahead: if Milan's aggressive rate cut proposal prevails, liquidity will be re-injected, and the bull market in crypto could truly begin. If Balkin's "fine-tuning" policy wins out, risk assets will continue to be suppressed, and whether BTC can hold the $90,000 level remains uncertain. Even more concerning, Fed Chair Powell is set to step down this May. Who will be the nominee favored by Trump? This is another huge variable.

The Fed meeting on January 27 is approaching fast. Employment data, confirmation of inflation turning points, and the nomination of the new chair—these three variables will hit together and directly determine the next phase of liquidity. Whether the crypto market receives easing benefits or continues to experience turbulence depends entirely on this policy tone.

What do you think? Should the Fed adopt an aggressive rate cut or fine-tune gradually? Can BTC withstand the pressure from policy disagreements?