Will the Fed raise rates in September or not? After the CPI release, the answer has become increasingly clear:

The market's expectation for a September rate hike has jumped directly to around 90%.

Even more strikingly, the market now fully expects the Fed to raise rates once more before the end of the year.

This is definitely not a comfortable macro environment for Bitcoin in the short term.

Because expectations of rate hikes continue to rise, the U.S. dollar and Treasury yields are under continued pressure to strengthen, while the valuations of risk assets will also be suppressed.

But I think the market has already priced in so many rate-hike expectations. When the hike actually happens, how much expectation gap will remain?

If the U.S. dollar and Treasury yields continue to rise, Bitcoin will face fairly obvious pressure.

But if rate-hike expectations have already been fully priced in and subsequent data does not continue to deteriorate, the market may instead see an adjustment in expectations.

So the biggest mistake right now would be to see a 90% probability of a rate hike and simply interpret it as meaning Bitcoin must fall.

The market never trades the news itself,

but rather the gap between the news and expectations.
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