Fren holding ETH, BTC, and SOL, be aware, you might have to stay up late tonight watching the market. The Fed's interest rate cut expectations have suddenly cooled, and the fear index is hovering at a low level, so those playing contracts must pay attention to their Position.

Just saw the news, Morgan Stanley has directly reversed its stance after the latest employment data came out—previously predicted rate cuts in December have been withdrawn. This is not a good sign for the crypto market.

In simple terms, it means high interest rates need to be maintained for a longer time. Why is this important? Because the Fed's interest rate policy basically determines where global funds flow. Recently, everyone was expecting a rate cut, and assets like Bitcoin had just started to climb from the bottom. Now that the "higher for longer" rhetoric has emerged, trouble has come:

The cost of capital is easy to calculate. With interest rates so high, isn't it nice to just throw money into government bonds and let it sit there earning interest? With stable and secure returns, who would still be willing to take the risk of trading coins? Naturally, the liquidity in the crypto market is being drained.

On the other hand, high borrowing costs will directly dampen speculative sentiment. Cryptocurrencies are inherently high-risk assets and are often the first to be sold off in such an environment.

In the short term, the market is likely to continue consolidating or even pull back. The market needs time to digest this hawkish signal, and investors will definitely be more cautious. The gains that were previously driven by interest rate cut expectations may need to be given back to some extent, and key support levels are likely to be tested repeatedly.

However, it must be said that the crypto market does not completely depend on the Fed. Recently, funds have been continuously flowing into Bitcoin spot ETFs, and the halving cycle is approaching. The on-chain ecosystem is also quite active. These are internal drivers that are not influenced by macro policies and can support the market during critical times.

In short, the next period may not be easy, but it won't lead to a collapse. For those holding positions, manage your risks well and avoid using too much leverage. If you're optimistic in the long term, this might actually be an opportunity to buy on dips.