An important recent development is shaking up the market. White House economic advisor Hassett is no longer a candidate for Federal Reserve Chair, and the collective opposition in the Senate has eliminated the most favored dovish candidate.

The market responded immediately. The US dollar index surged, gold prices dropped accordingly, hitting this week’s lowest point. Behind this coordinated move is the market’s re-pricing of the Fed’s policy direction.

From the perspective of the crypto market, this change brings several direct impacts:

First, the expectation of rate cuts has been significantly weakened. If the Fed Chair candidate is not dovish, the pace of rate cuts in the second half of the year is likely to be slower than previously anticipated. With this shift in expectations, the dollar will remain strong in the long term, and assets priced in USD, such as Bitcoin, will face short-term pressure.

Second, there are signals that market liquidity may contract. Once the Fed’s policy tone becomes more hawkish, high-risk assets are prone to sell-off. Cryptocurrencies, as representatives of risk assets, will be among the first to bear the brunt of withdrawal.

Third, the Fed’s personnel changes are still ongoing, with other appointments expected. This means policy uncertainty remains, and the market could face new volatility at any time.

From a technical standpoint, whether Bitcoin can hold key support levels still needs observation, but it is certain that the current environment has shifted from abundant liquidity to tightening liquidity. This will have a direct impact on short-term market trends.