The market sentiment reversal in the past few days can be boiled down to one thing— the interest rate cut signal thrown by New York Fed's Williams before the blackout period.

This move is ruthless. The expectation for a rate cut in December soared directly to 70%, and the market immediately came to life.

Why can a single sentence cause such a huge wave? The timing is just right. Once the silent period arrives, officials collectively refrain from speaking; at this time, expressing opinions will amplify the influence exponentially. Moreover, Williams himself is a core advisor to Powell, and his statements are essentially equivalent to a policy barometer. This is textbook-level expectation management.

So what does the interest rate cut mean for the crypto market?

On the surface, interest rate cuts = liquidity easing. With the decline in US dollar yields, funds will naturally migrate to high-volatility assets, and theoretically, Bitcoin as an asset will benefit. The logic makes sense.

But the problem is that the market has already priced in this expectation to seventy percent. If the positive news is priced in too early and there is no cut in the end, there will inevitably be severe fluctuations in the short term.

There is also a deeper concern: interest rate cuts may be interpreted as "the economy can't hold on any longer." This signal may actually suppress risk appetite, as no one wants to take on high-risk assets during an economic downturn.

The entire crypto market is currently stuck on one word—liquidity.

What path will the Federal Reserve take? Will the U.S. Treasury be hindered by a government shutdown? Will geopolitical tensions suddenly create issues? All these variables affect the scale of capital inflow. The various target prices set for Bitcoin by institutions essentially bet on where the liquidity ceiling will reach.

In the short term, if the interest rate is indeed cut by 25 basis points in December, the market will likely welcome a wave of upward momentum. But in the medium to long term? We still need to pay attention to hard indicators like inflation data and employment reports.

It's not just a matter of how explosive the news is right now, but rather how critical liquidity is. Interest rate cuts can provide a push, but how far it can go depends on the subsequent macro data.