The recent shift in the Federal Reserve's stance is worth paying attention to. Gulfsby stated that more data is needed before considering rate cuts, Schmidt emphasized that inflation remains high, and Hamack straightforwardly said that policy remains restrictive. These officials' statements may seem routine, but their implications for the crypto market are quite different.

Ultimately, the rise and fall of crypto assets are directly linked to liquidity. What does it mean when the Fed signals "data dependence" and "maintaining tight policy"? It indicates a tightening of liquidity. If rate cuts are really not expected until 2026, how long will this wait be? Moreover, inflation data is unlikely to decline significantly in the short term, leaving limited room for easing policies. Under these expectations, hot money flowing into risk assets will gradually reassess its allocations.

A close look at recent market movements reveals the clues. Crypto prices have indeed rebounded, but quickly pulled back after the rebound, with this oscillating pattern recurring. Retail investors are easily fooled by rebounds, chasing highs and entering the market, only to be trapped during pullbacks. This is not coincidental but a market digesting the expectation of liquidity tightening.

From another perspective, understanding the Fed's logic involves the keywords "data" and "restrictiveness," which are effectively signaling to the market: uncertainty still exists, and policy adjustments will not be rushed. This uncertainty influences investors' risk appetite, making capital more cautious. The crypto market is most sensitive to such sentiment shifts; once funds exit, prices tend to adjust more violently than in traditional markets.

How should retail investors respond? First, recognize the reality. Chasing highs does not equal investing; blindly rushing in during market oscillations is like betting on risk in a turbulent environment. Second, change your perspective. View the Fed's policy statements as a barometer of market sentiment, not as absolute indicators of good or bad news. There may be discrepancies between policy signals and actual data, so continuous tracking is necessary rather than making one-off judgments. Third, stay patient. The crypto market is never short of opportunities, and history shows bull markets will come. But during periods of uncertain liquidity, quick moves are often less wise than waiting for clearer signals.

Many retail investors lack understanding of market cycles. When signs of tightening appear, what should be done is not rushing to bottom-fish but observing whether the market has already priced in these signals. If the market is still testing support levels repeatedly, it suggests that a true bottom has not yet formed. At this point, holding cash is smarter than rushing into the market.

The Fed’s changing attitude fundamentally reflects the shift in the global liquidity environment. In this broader context, the crypto market needs more time to readjust its prices. Retail investors should learn to wait for confirmed signals amid uncertainty. Fear itself is not the problem; the problem is making hasty decisions driven by fear. Calmly observing the market and waiting for the right entry points is the right mindset.