At 2 a.m. Eastern Time on Thursday, the highly anticipated Fed interest rate decision is about to be announced. The market generally expects that this meeting will announce a rate cut, but there is controversy over the extent of the cut, with the focus being on the choice between 25 basis points or 50 basis points.

If the Fed only lowers the interest rate by 25 basis points, the market reaction may be relatively muted, as the previous rise has already reflected this expectation to some extent. If a reduction of 50 basis points is chosen, it may trigger further increases, but the upside potential may not meet expectations, mainly because most of the favorable factors have already been reflected in the "buy the expectation" phase.

However, what is more concerning for investors is the future policy direction of the Fed. The monetary policy direction in the fourth quarter of 2025 will mainly depend on inflation trends. If inflation remains moderate, the Fed may continue to implement accommodative policies; but if inflation rebounds, the pace of accommodative policies may be affected.

From the recent market performance, Bitcoin has gained support near $114,800 and is once again challenging the $117,000 mark. However, the bullish momentum has weakened recently, and the upward trend that started from $107,200 has released a large amount of trapped positions, while low-position short orders have been cleared, indicating that the market is brewing a new trend.

As the current market sentiment tends to be exuberant, investors need to remain rational and vigilant. The upcoming interest rate decision may have a significant impact on the overall direction of the cryptocurrency market in the coming months. In light of this critical moment, market participants should closely monitor the content of the decision and adjust their investment strategies accordingly.