Make an overall outlook for the first quarter of 2026.

Currently, US GDP growth has reached 4.3%, which looks impressive. But this figure has two issues. First, this round of growth is mainly driven by AI tech giants' investment race and government spending, with the money not truly reaching employees' pockets, representing a typical jobless growth. Second, the government has significantly increased debt to subsidize the chip industry and energy sector, artificially boosting GDP data through this method.

For the Federal Reserve, this is simply the biggest confusion. Traditional economics tells the Fed that GDP growth must lead to employment prosperity—that's the Okun's Law. But now, the AI era breaks this rule—AI indeed creates wealth but does not generate corresponding employment opportunities.

Looking at prices, service sector inflation has already fallen back to pre-pandemic levels. The Fed's dual mandate (controlling inflation + promoting employment) seems halfway achieved. Even if CPI shows positive signs later, the increase won't be too large. Conversely, if negative data appear, prices could decline in the opposite direction.

The unemployment rate in Q1 is likely to rise to 4.7%-4.8%. At this point, the market will see a paradox: prices haven't risen, but unemployment has increased. Normally, this should increase expectations for rate cuts and benefit the market rally. But the Fed might not see it that way.

The Fed will argue that this rise in unemployment isn't due to large-scale layoffs but is just frictional unemployment caused by more job seekers, with no fundamental economic problems.

So the situation becomes: strong GDP growth + moderate prices + high unemployment but no large layoffs. Based on these data, the Fed is very likely to keep interest rates high, shifting from a dovish stance to a neutral or even hawkish stance. This means the rate cut expectations will be disappointed.

Once rate cut expectations fade, the recent high in the US stock market is likely to be knocked down. Although the crypto market may not necessarily rally, it often doesn't fall sharply during declines. Bitcoin and mainstream coins will be under pressure as US stocks leverage unwinds.

The logic of Q1 news is: bad news remains bad news. Unless a truly super-negative event occurs, turning it into good news, volatility will be the main theme.

With Powell's term nearing its end, his style will become more conservative—preferably observing rather than making aggressive decisions. Coupled with the Fed's data-driven decision lag, this points to a high probability of maintaining the current policy.

Overall, the entire crypto market in Q1 may just oscillate weakly, unlikely to see epic crashes, but also not expecting any turning points. Basically, it will be a continuation of a trash market.