#币圈观察员 Will the cryptocurrency market experience a big pump during the Spring Festival? Can it replicate the mystical market trend of the Spring Festival? Instead of the annual Lunar New Year market trend, it has experienced another significant drop, further undermining the already fragile market confidence!

What factors are influencing this market trend?

The Federal Reserve will announce its meeting decisions this week, and the market is hedging in advance
The Fed will announce its January interest rate decision at 3 a.m. Beijing time on Thursday. The market generally expects the Fed to maintain the federal funds target range at 4.25%-4.5% this month, temporarily pausing its easing steps after three consecutive rate cuts in the second half of last year. According to the CME's FedWatch Tool, traders in the interest rate futures market currently have a 99.5% probability that the Fed will stay put this month.

It is worth mentioning that despite the Federal Reserve's decision to skip rate cuts this month seems almost certain, investors are apparently still closely focused on Fed Chairman Powell's views on the next interest rate direction.

US President Trump emphasized during his speech at the World Economic Forum annual meeting in Davos last Thursday that he will demand the Fed to immediately lower interest rates, and claimed that he understands monetary policy better than those responsible for formulating it. However, it is obvious that the highly independent Fed may not necessarily follow Trump's wishes, especially as his series of policy measures and trade policies may exacerbate inflation in the United States.

Some analysts in the market also believe that the Federal Reserve may start raising interest rates this year.

ABP Invest founder and chief investment officer Thanos Papasavvas wrote in a column that 'We don't believe the Fed will cut interest rates in 2025 - we don't even think the Fed has ended ( tightening monetary policy ). Instead, we expect the flexible US economy and Trump's policies to raise inflation expectations, forcing Fed Chairman Powell to start raising rates from September!
He also mentioned that the Fed hopes to maintain its anti-inflation credibility after mistakenly judging the previous price increase as temporary. Therefore, Papasavvas predicts that if a choice must be made, the Fed will be "super orthodox" and choose to fight inflation rather than promote employment.

The Fed's speech this week will be the focus of the market's attention, and the market volatility will increase. Some traders choose to leave early to wait and see, waiting for clear signals.

In addition, in the first week after the thunder and rain threat of tariffs, Trump took real action. On January 26th, local time, President Trump of the United States stated that he would impose a 25% emergency tariff on all goods entering the United States from Colombia, and the 25% tariff would be increased to 50% within a week, in response to Colombia's refusal to accept illegal immigrant deportation flights. Trump's tariff and anti-immigrant measures also put pressure on the US stock market.

US stock futures fell in early Asian trading on Monday, with Nasdaq 100 futures down about 1.2%, S&P 500 futures down 0.5%, and Dow futures down 0.2%. The turmoil in traditional financial markets has also cast a shadow over the Crypto Assets market.
The effects of the DeepSeek earthquake in Silicon Valley have also spread to the currency circle. The AI concept fund sector is rotating extremely fast, and some previously hot project tokens have even experienced five consecutive daily declines. At the same time, the market value of the new Solana chain-based Meme token SEEK (DeepSeek) has exceeded 30 million US dollars, with a 24-hour trading volume of 56.9 million US dollars.

Future market trends
The market morale is unstable, and even some voices believe that it has turned bearish. What will happen next? Will there be a bull market?

BMEX co-founder Arthur Hayes just predicted that "Bitcoin will experience a significant pullback in the short term, with prices potentially falling from the current level to the range of $70,000 to $75,000, possibly accompanied by a minor financial crisis. With central banks around the world resuming quantitative easing policies and injecting liquidity back into the market, Bitcoin will restart its rally and is expected to surge to $250,000 by the end of the year.

However, in terms of the short-term market trend during the Chinese New Year, the statistical charts from 2018 to 2024 show that Bitcoin and altcoins often perform well.