The Federal Reserve (FED) does not engage in point shaving, is it the end or rebirth for alts?

"Ice and Fire" in the Sideways Stalemate

The price of Bitcoin has been fluctuating between $100,000 and $110,000, with implied volatility approaching a one-year low and actual volatility hitting a historical low. The market is like a stagnant pond, with ETF inflows slowing down and futures positions continuously decreasing, leading investor sentiment to fall into a "lying flat" mode. Some traders even self-deprecatingly remarked: "Buying options now is like betting on the weather forecast; the hopes for July have been painfully pushed to September."

Behind this "sideways" situation is the market's deep anxiety about the Federal Reserve's policies. The Federal Reserve continues to reduce its balance sheet, and the expectation of interest rate hikes remains. The liquidity in traditional financial markets is tightening, and the "adventurer's ship" of cryptocurrency is also hard to escape turbulence. But the darker the moment, the more we need to think calmly: If the Federal Reserve does not inject liquidity, can altcoins really survive? Is there still hope for a bull market in 2025?

The Fed's "Water Cut", the Life and Death of Altcoins

The Federal Reserve's tightening policy is like a double-edged sword:

1. Liquidity withdrawal hits altcoins the hardest

The Federal Reserve's balance sheet reduction directly withdraws funds from the market, and high-risk altcoins, lacking institutional support, have become heavily hit by sell-offs. Data shows that over 70% of the top 100 altcoins by market capitalization have fallen to their year-to-date lows.

2 Funds concentrating towards Bitcoin

Investor risk aversion is rising, leading to a "great migration" of funds from altcoins to Bitcoin. The market capitalization of Bitcoin has rebounded to 55%, reaching a new high since 2024, further squeezing the survival space of altcoins.

But there is life even in desperate situations:

• Technical Upgrade Counterattack

Some altcoins have attracted developer communities and long-term funds (such as the explosion of the Ethereum Layer 2 ecosystem) through on-chain governance, cross-chain interoperability, and other technological breakthroughs.

• Application Scenario Breakthrough

In the sub-sectors of DeFi, NFTs, and others, some altcoins have found real demand in areas such as payments and gaming by leveraging differentiated positioning (such as Solana's high performance and Avalanche's subnet architecture).

Bull Market Turning Point: Three Major Catalysts on the Way

1. The Fed's "marginal shift" in policy Despite the current hawkish stance of the Federal Reserve, economic data has shown signs of weakness: the U.S. May CPI has dropped to 3.2%, and the manufacturing PMI has fallen below the threshold. The market is betting that the Federal Reserve may begin a rate cut cycle in Q4 2025, and expectations for liquidity easing may reignite risk assets. Historical experience shows that Bitcoin often experiences explosive growth at the beginning of a rate cut (such as the increase of over 300% after March 2020).

2. The "Lag Effect" after Bitcoin Halving The Bitcoin halving in April 2024 has already laid the groundwork for the market. Historical patterns show that the price peak usually lags by 12-18 months after the halving (i.e., mid to late 2025). The current Sideways movement may be the "calm before the storm"; once the key resistance level of $110,000 is broken, the upside potential could be completely unlocked.

3. The "Two-Way Rush" of Regulation and Institutional Funds

• Policy Green Light

The U.S. SEC has approved a Bitcoin spot ETF, and the Trump administration is promoting crypto-friendly legislation to clear obstacles for institutional entry.

• Capital Accumulation

The ETF holdings of giants like BlackRock and Fidelity continue to grow, while sovereign funds like the Abu Dhabi Sovereign Fund quietly position themselves, with an incremental capital of about $70 billion expected to flow in by the end of the year.

Investor Strategy: Lie Flat or Buy the Dip?

In the face of market uncertainty, three types of strategies are worth paying attention to:

1. "Turtle Breathing Tactics"

Short-term fluctuations are hard to predict, it is advisable to reduce leverage operations, hold core assets like BTC/ETH, and wait for a clear trend.

2. "Ambush Potential Track"

AI + blockchain, RWA (real-world assets), Bitcoin Layer 2 and other emerging fields may be the main battleground for the next bull market.

3. "Keep a close eye on macro signals"

The Federal Reserve's interest rate decision, U.S. non-farm data, and weekly net inflows into Bitcoin ETFs will be key triggers to break the Sideways movement.

Darkest Hour, Survivors of Faith

The cryptocurrency market is never short of drama. During the 2018 bear market, Bitcoin fell from $20,000 to $3,000, but those who held on ultimately saw a tenfold return in 2021. The current sideways movement may be yet another stress test for long-term investors.

Remember: Bull markets are born in pessimism, grow in skepticism, and die in euphoria. The Federal Reserve's "tap" may be temporarily closed, but technological innovation, institutional entry, and cyclical patterns are still building momentum for the 2025 bull market.