The candlestick chart at 2 a.m. is still flickering, but the internal voices within the Federal Reserve are causing chaos in the crypto community. Last night, a new friend in the space urgently reached out to me, saying they had fully invested in altcoins last week amid expectations of rate cuts, only to lose 18% overnight and now can't hold on, wanting to cut losses. I've heard this story too many times.

To be honest, the Fed officials are now arguing fiercely. Hawkish officials refuse to back down, insisting that inflation is not yet under control, and cutting rates now would be adding fuel to the fire; but dovish voices are shouting that with such high interest rates, employment will suffer mass layoffs, and they need to loosen monetary policy quickly. Even Powell himself said, "December rate cuts are far from certain," and once that statement came out, the market started speculating wildly.

Why do the Fed's small moves have such a big impact on crypto assets? Simply put, high-risk assets like Bitcoin thrive on liquidity. When rate cuts come, funding costs decrease, and idle money rushes into high-yield opportunities; when rate hikes happen, the market quickly reverses, and funds flee rapidly. Altcoins, due to their smaller size and higher volatility, are even more susceptible to these expectation shifts.

At this point in time, many new entrants are betting on whether the Fed will cut rates, and the entire market feels like a tightly wound string. I want to say that instead of blindly guessing based on Fed officials' statements, it's better to understand your own risk tolerance. Protecting your principal and managing your positions prudently is much more reliable than betting on a single market move. During volatile periods like this, those with a good mindset can survive, while those whose mental state collapses will be waiting to cut losses.