The Federal Reserve Remains Steady, But the Market Actually "Wants a Rate Cut"

On June 18, 2025, the Federal Reserve chose to keep interest rates unchanged, maintaining the target range at 4.25% to 4.5%. It seems calm on the surface, aligning with market expectations, but don’t be fooled by appearances—after this meeting, market expectations for a rate cut in September soared to 71%!

What does this mean? The Federal Reserve may not say it, but the market has already "imagined" a future easing scenario. Against this backdrop, the Fed has raised its inflation forecast (to 3%) while lowering its economic growth forecast (to 1.4%), simultaneously claiming there’s no rush to cut rates while presenting a stance that "the economy may not hold up."

Powell continued to use "vague language" at the press conference: inflation is still relatively high, and the economy remains uncertain, "We will closely monitor the data"—translated: They haven't figured it out, and market sentiment has taken the lead.

BTC and ETH Seem Stable, But Are Actually Stuck in a "Waiting Zone"

Bitcoin has recently been firmly stuck around $104,000, while Ethereum is also moving sideways around $2,550. From the data, BTC's 30-day volatility is only 1.9%, and ETH is just 3.17%, both at historically low levels.

In other words: Prices are moving, but the market is waiting.

The market is entering a "stabilization period," and this stability is not because everyone is bullish or bearish, but because large funds are on the sidelines: Are they waiting for the Fed's next move? Or for inflation data to continue softening? Or for some black swan event to unfold?

If you rashly chase highs and cut losses at this time, you may fall into a "dilemma"—so we need to clarify a key question:

Is the current market "brewing a new trend"? Or is it already "lying flat and oscillating"?

Understanding Market Conditions is the First Step in Trading

Why is it so important to judge market conditions? Because the scenarios for using strategies are fundamentally different!

• If you judge that the market has a trend, then what you should do is chase the trend, for example, using MACD or moving averages to open positions in the direction of the trend;
• But if you judge that the market is oscillating, then you should do the opposite, buying high and selling low, for example, performing mean reversion at the upper and lower bounds of the range.

In reality, most of the time the market is in a vague state—when you use a trend strategy, it suddenly reverses; when you want to trade oscillations, it breaks through directly.

So you need a "state scout" that doesn’t predict direction but tells you: which set of tactics you should use.

Choppiness Index: Helping You Determine Whether "Stability" is Real or Fake

At this point, the Choppiness Index becomes our good helper. Its value ranges from 0 to 100, not telling you the direction of price movement, but indicating whether the market is "trending" or "oscillating."

In simple terms:

• If you see the Choppiness Index above 61.8, it indicates the market is "sideways," suitable for oscillation trading;
• If it is below 38.2, it is likely in a "trending" state, suitable for chasing trends;
• The middle area requires combining other signals for further observation.

To verify its reference value in the current market, I used AiCoin's custom indicator feature to construct and display the Choppiness Index in real-time, overlaying it on the 1-hour candlestick chart for analysis.

• In Phase One, the Choppiness Index is clearly close to the high value range of 61.8, with the candlestick trend showing sideways consolidation, lacking a clear direction, and the market is overall in a typical oscillating state;
• Entering Phase Two, the Choppiness Index quickly falls back and oscillates around the low critical value of 32.8, at which point we can clearly see the candlestick breaking out of the oscillation range, and trend characteristics begin to emerge;
• Now in Phase Three, the Choppiness Index has risen again, approaching the 60 level—this indicates that the market is likely back to a "sideways" rhythm. Isn’t this what we previously felt as a "stabilization period"?

Of course, it is worth emphasizing: the Choppiness Index itself does not provide buy or sell signals, nor does it tell you whether to go long or short; its core function is to—confirm the current market's structural attributes, thereby assisting us in choosing the appropriate tools and strategies.

If you need to customize your own market judgment indicators, you can download AiCoin to try it out: https://www.aicoin.com/zh-Hans/features

Market Stability ≠ Arbitrary Operations, Next We’ll Discuss How to Take Action

So to summarize: The current market appears calm, but is actually in a state of macro uncertainty and technical compression. Whether it is stability with change or change with hidden stability, the most important thing is not to blindly apply strategies, but to clarify what kind of market structure you are facing.

This is the significance of the Choppiness Index—helping us dissect the structure, clarify direction, and lay a solid foundation for strategy selection.

As for what specific strategy to use? How to set stop losses reasonably?

——We will discuss practical aspects related to the current market in the next article.

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