Last night, when the US economic data was released, the entire crypto market was shaken.

The preliminary Q3 real GDP annualized quarterly rate was announced at 4.3%, far exceeding the market’s previous expectation of 3.3%. Such a figure directly changed the market’s outlook on the Federal Reserve’s next move. The previously discussed rate cuts? Now they are basically off the table.

The Chicago Mercantile Exchange’s FedWatch tool immediately responded— the probability of the Fed maintaining interest rates in January surged to 87%. In contrast, the probability of rate cuts dropped to only 13%, almost negligible. This shift in expectations was instantly reflected in market prices. Bitcoin once dipped to a low of $86,500 in the early hours, then lacked momentum to rebound; Ethereum was also pressed firmly below the $3,000 mark.

Why can a single economic data point make the crypto market so sensitive? Essentially, interest rates are the key switch for global capital flows.

When the Fed insists on maintaining high interest rates, US assets act like a giant magnet, attracting global money. Why would investors take the risk of entering the crypto market? Instead, they might prefer to buy US Treasuries for interest, or deposit money in banks to enjoy fixed deposit yields—safe and steady. This also explains why recent markets have always felt "bloodless," with Bitcoin struggling to push higher.

There’s also a variable stirring market sentiment. US President Trump publicly stated that the condition for the Fed Chair’s election is to support rate cuts, emphasizing the importance of rate cuts multiple times. This political and policy game could become a key variable influencing market expectations and may trigger future volatility.

Currently, crypto investors need to closely monitor two directions: first, whether upcoming economic data can bolster expectations for rate cuts; second, how policy-level voices will evolve. In the short term, the high-interest-rate environment will continue to exert pressure on the crypto market.