Friends who are still wide awake at 3 a.m. staring at the charts should have felt that suffocating sensation. On one side is the intense internal policy struggle within the Federal Reserve, and on the other side, the market tormenting itself through extreme volatility. The chart patterns resemble an electrocardiogram, more nerve-wracking than the risk of contract liquidations.

This internal divide within the Federal Reserve, frankly, is a no-win multiple-choice question. The hawks and doves have completely torn into each other, with the core dispute being simple: should they continue to fight inflation or prioritize safeguarding employment?

The hawkish stance is very firm. They believe the inflation thorn has not been fully removed, and recklessly loosening policy would only undo previous efforts. The implicit message is clear: don’t expect any surprise rate cuts in the near future. Meanwhile, the doves, starting from the pressure in the employment market, worry that overly tight policies could lead to rising unemployment and greater economic risks. This opposition is nothing new, but this time, the rift has indeed escalated.

For newcomers to the scene, it might seem like just Washington’s internal power struggle, with little relevance to their accounts. But that’s a complete misconception. Every policy tilt by the Federal Reserve directly impacts the direction of global liquidity, and as a risk asset, cryptocurrencies tend to be the most volatile. Whether your position can withstand this phase largely depends on how the Fed chooses to proceed next.

A more concrete issue is that Powell’s recent statements have almost declared the likelihood of a December rate cut. Although he didn't state it so plainly, the signals are very clear. This means the market’s previously high hopes for a rate cut window are closing, and expectations for liquidity easing are being re-priced. For holders, this is undoubtedly a significant signal that requires serious attention.

From eight years of market experience, decisions made by the Fed in this state are often filled with uncertainty. They are essentially gambling—betting that inflation can gradually cool without harming employment, and betting that the market can withstand this policy wobble. As crypto holders, we happen to be right at the forefront of this gamble. Any slight policy adjustment could trigger a fierce market reaction.

Therefore, if you’re still debating whether to add to or reduce your position, the key is to focus on the Fed’s changing stance. This is not just a policy discussion; it’s the market driver that directly influences your asset allocation.