The Federal Reserve (FED) maintains the interest rate unchanged, the liquidity turning point has arrived, Bitcoin may hit bottom and rebound.

1. Interpretation of The Federal Reserve's Interest Rate Meeting: Policy Stabilization, Market Expectation Adjustment

The Federal Reserve (FED) decided to maintain the target range for the federal funds interest rate at 4.25%-4.50% during its latest monetary policy meeting, in line with market expectations. However, its policy wording, economic forecasts, and guidance on future interest rate paths have had a profound impact on the market.

1.1 Core content of The Federal Reserve (FED) resolution: Maintain policy stability, but release easing signals.

The Federal Reserve decided to keep the benchmark Interest Rate unchanged and emphasized that "the policy stance remains restrictive to ensure inflation returns to the 2% target." Compared to the past few meetings, the wording of this decision has softened, no longer emphasizing the "need for a longer period of restrictive policy."

The Federal Reserve (FED) slightly lowered its GDP growth forecast in its latest economic prediction and raised its inflation expectations for the coming years. This shows that policymakers are weighing the contradiction between economic slowdown and inflation stickiness.

The Federal Reserve announced that the pace of its balance sheet reduction will decrease from $60 billion per month to $50 billion, signaling that the liquidity tightening cycle is about to slow down.

The dot plot shows that the median interest rate expectation of FOMC members for 2025 is 3.75%, indicating at least two rate cuts. However, there are differences among officials regarding the timing of the rate cuts.

Overall, the Federal Reserve has released a series of easing signals this time: softened wording, a slowdown in balance sheet reduction, a downward adjustment in economic growth expectations, and the dot plot showing a rate cut path.

1.2 The direct impact of The Federal Reserve (FED) policy on the market: liquidity turning point approaching, risk assets迎来转机

The US dollar index fell sharply, recording the largest single-day drop since 2023. The weakening of the dollar is conducive to capital inflows into high-yield assets.

The yield on U.S. Treasuries has declined, with the 10-year U.S. Treasury yield falling from 4.3% to 4.1%, indicating that the market is digesting the possibility of future interest rate cuts.

U.S. stocks, especially technology and growth stocks, have experienced a strong rebound. The Nasdaq index surged more than 2%.

The crypto market reacted quickly, with Bitcoin rising over 5% in the short term, breaking through the key resistance level of $85,000.

Overall, the signals released by the Federal Reserve's policy decision have a profound impact on the market. The weakening of the dollar, the decline in U.S. Treasury yields, the rise in technology stocks, and the rebound of Bitcoin all indicate that the market is adjusting its expectations for liquidity. The liquidity turning point may be approaching, and high-risk assets like Bitcoin may usher in a new round of upward cycles.

2. Macro Market Background: The Liquidity Turning Point Has Arrived, Funds May Flow Back to Risk Assets

2.1 Recent Liquidity Environment Analysis: The market funding inflection point has appeared, and a large amount of off-market funds is waiting to enter.

The pace of global liquidity tightening is slowing down. The Federal Reserve has clearly stated that the pace of balance sheet reduction will slow, and the dot plot indicates that there may be 2-3 rate cuts in the next 12 months.

The correlation between the US stock market and the cryptocurrency market has strengthened, with the cryptocurrency market becoming more sensitive to changes in macro liquidity. The 90-day rolling correlation between Bitcoin and the Nasdaq index reached a high of 0.75 in 2024.

Investor risk aversion is rising, leading institutions to reduce their allocation to crypto assets, but the market structure remains healthy.

The total balance of the stablecoin market has grown to $229 billion, indicating that off-market funds are accumulating, waiting to enter. The total balance of USDT and USDC has been continuously increasing since the end of 2023.

2.2 The relationship between liquidity and the cryptocurrency market: Historical data reveals BTC trend patterns

2017-2021: The easing cycle drove the BTC bull market, and Bitcoin experienced two significant surges.

2022-2023: Tightening policies led to a significant decline in BTC, with a total drop of over 60% for the year.

2024-2025: The reduction of the balance sheet slows down, BTC welcomes a rebound. Currently, the Federal Reserve is at a critical stage of policy shift, and the liquidity turning point has become evident.

3. Bitcoin Market Outlook: Possibility of a Bottom Rebound and Risk Factors

3.1 Bitcoin Short-term Price Trend Analysis: Bottoming Signals Strengthen, Technical Indicators Show Rebound Potential

Key support levels of $76,000-$80,000 form the market bottom.

RSI (Relative Strength Index) rebounds, market momentum is recovering.

The trading volume is gradually increasing, and the market liquidity is recovering.

If the Federal Reserve maintains the current monetary policy, Bitcoin may continue to oscillate and form a bottom structure in the short term, and welcome a rebound market in the second quarter.

3.2 Market Trends of Institutional Investors: Capital Inflows Strengthen Market Support

Grayscale's BTC holdings remain stable, with no large-scale sell-offs.

The funding flow of the Bitcoin spot ETF shows that institutions are increasing their holdings of BTC.

MicroStrategy continues to increase its holdings of BTC, and institutions remain confident in its long-term value.

3.3 Possible market risks: Uncertainty still exists, and one must be vigilant against sudden shocks.

The uncertainty of The Federal Reserve (FED) policies. If inflation data rebounds, the FED may delay interest rate cuts.

Global geopolitical risks may affect investors' risk appetite.

Liquidity risks within the cryptocurrency market, such as potential issues with exchanges.

4. Investment Strategies and Conclusions

4.1 How should investors respond to the current market?

Short-term traders: Focus on the key support level at $80,000, and consider increasing positions when breaking through the $88,000 area. Strictly set stop-loss points to avoid excessive exposure.

Medium to long-term investors: you can build positions in batches when prices pull back, especially in the $88,000-$83,000 range. Pay attention to BTC's long-term trend and changes in market sentiment.

Institutional investors: closely monitor changes in The Federal Reserve (FED) policy, considering long-term holdings of Bitcoin and Ethereum to hedge against the risk of dollar depreciation.

4.2 Future Market Outlook

The outlook for improving market liquidity is clear, which is expected to drive the price of Bitcoin up.

Bitcoin may enter a new round of upward cycle, but it may face fluctuations and consolidation during the process.

Market risks still exist, and investors need to closely monitor The Federal Reserve (FED) policy adjustments and global economic changes.

Overall, under the backdrop of the Federal Reserve's policy stabilization and the gradual improvement of the liquidity environment, the Bitcoin market presents a relatively optimistic outlook, but volatility remains high. Investors should conduct reasonable asset allocation based on their own risk tolerance and market trends.