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Jiang Zhuo'er: It is expected that after the Federal Reserve's decision, the market will first decline and then rise, with BTC possibly reaching 84,000 USD

Jiang Zhuoer, the founder of Liebit Mining Pool (B.TOP), posted on platform X that at 2 AM Beijing time on September 17, the Federal Reserve will announce its interest rate decision. According to the 30-day federal funds futures prices, the current probability of a 25 basis point rate hike is about 92%. He expects the Federal Reserve to raise the target interest rate range from 3.50% to 3.75% to 3.75% to 4.00%, believing that this outcome is basically a foregone conclusion.After the interest rate decision is announced, the Federal Reserve will also release the dot plot. Jiang Zhuoer stated that attention should be focused on the median of the interest rate forecast and the central trend range after excluding the highest and lowest three points each. He expects the dot plot to show two rate hikes in total by 2026, meaning there will be one more rate hike within this year after the current hike, and the related expectations may lead to a short-term market decline.Jiang Zhuoer believes that the speech by Federal Reserve Chairman Kevin Warsh, starting at 2:30 AM, is the biggest variable and expects it may release dovish signals. Therefore, he judges that the most likely market path is "falling first and then rising": a decline after the interest rate decision and dot plot announcement, followed by a rebound after Warsh's speech. He expects Bitcoin may drop below $75,000 before rebounding to $83,000 to $84,000, followed by a significant adjustment.

Analysis: Before the Federal Reserve's decision, Bitcoin exhibited a relatively independent market trend, with reduced correlation to the US Dollar Index and US stocks

According to CoinDesk, Bitcoin has shown a relatively independent trend before the Federal Reserve's interest rate decision was announced, with a significant decrease in its short-term correlation with the US dollar index and US stocks. Alice Liu, the research director at CoinMarketCap, stated that the short-term correlation coefficient between Bitcoin and the US dollar index has dropped to 0.08, compared to -0.54 over the past 30 days; its correlation coefficients with the S&P 500 index and the Nasdaq index have decreased to 0.43 and 0.3, respectively, from 0.75 and 0.6 the previous day.Liu believes that the market has recently shifted its attention to the CLARITY Act, which failed to pass a key procedural vote in the Senate on Tuesday, temporarily overshadowing regulatory progress with macro factors. As the correlation weakens, the strategy of hedging Bitcoin long positions by shorting S&P 500 futures has currently decreased in reliability. The market generally expects the Federal Reserve to raise interest rates by 25 basis points, a scenario that has been largely priced in.This decision will test whether Bitcoin can re-establish its linkage with the US dollar and US stocks; traders also need to pay attention to the guidance after the meeting and fluctuations in US Treasury yields, as a significant rise in the latter could tighten financial conditions and drive risk-averse capital flows into the crypto market.
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