Crypto Market Rebounds Amid Interest Rate Hike Uncertainty

The Federal Reserve's interest rate hike has reshaped the macro landscape, and the crypto market is rebounding as bearish sentiments are exhausted. The crypto market exhibited a typical structure of 'policy and interest rate shock leading to a decline → concentrated risk release → short covering driving a rapid rebound.' On September 16, the Fed raised the federal funds target range by 25 basis points to 3.75% - 4.00%, marking an important turning point in this policy cycle.

The crypto market's rebound cannot be simply understood as a sudden improvement in the macro environment; more importantly, it comes from 'exhaustion of selling pressure after bearish news + short squeeze.' Around September 18, a large-scale short liquidation occurred across the market, further creating passive buying pressure.

Next week is expected to be a 'policy expectation repricing week after the rate hike,' rather than just a data week. The U.S. will not release new CPI or PCE data, but several Federal Reserve officials will speak intensively on September 21-25, and their statements regarding further rate hikes, energy price transmission, and inflation persistence will be closely watched.