Recently, the global financial markets have been squeezed by two opposing forces.

One is Trump's threat to impose a 500% tariff on Chinese goods, directly escalating trade tensions; the other is the Federal Reserve's largest-scale overnight repurchase operation in 20 years, injecting $6.75 billion at once, which signals—America is experiencing a liquidity crunch. The crypto market is hit hardest. In early October, Bitcoin's monthly decline exceeded 15%, and the total liquidation in the market broke through $19.1 billion, which is truly alarming.

Where is the root cause? When liquidity tightens, risk assets suffer. Coupled with Fed Chairman Powell occasionally mentioning that "balance sheet runoff may pause," the market immediately recalls the liquidity crisis of 2019, and panic quickly ignites. Add in the tariff turmoil, global capital turns to safe-haven assets, and crypto market volatility naturally intensifies.

But a turning point is forming.

Data from the options market is quite interesting—OSFR interest rate positions have surged significantly, with institutions betting a 93.5% probability that the Federal Reserve will cut interest rates by a total of 50 basis points before December. In other words, some institutions are already quietly positioning themselves, waiting for easing to come.

For retail investors, it’s not the time to sit back and do nothing, nor is it advisable to blindly buy the dip. Remember these three key points:

**First, keep a close eye on the Federal Reserve meeting on October 30.** If interest rate cuts are actually implemented, mainstream cryptocurrencies like Bitcoin and ETH will benefit significantly. They had already shown support during October's sharp decline.

**Second, allocate your positions wisely.** Keep 50% of your funds in Bitcoin or ETH, as these assets have endured October's turbulence and proven their resilience; hold 30% in cash to respond to potential pullbacks—don’t deplete your ammunition; and avoid touching altcoins with 90% or more loss, as some have already fallen more than 90%.

**Third, monitor two key signals.** Outflows of Bitcoin from exchanges reflect large holders’ willingness to hold, and the US Treasury's RRP balance indicates the tightness of the liquidity situation—these two indicators are more reliable than market sentiment.

It seems that the combination of tariffs and liquidity "double whammy" is frightening, but history shows that whenever the Fed shifts towards easing, risk assets gain significant support. There’s no need to rush to sell the top or blindly buy the dip. By late October, the policy outlook will be clearer, and market trends will become obvious, bringing investment opportunities. Wait and watch, don’t rush.