#BTC's fall in the early morning after the expectation of rate cut increased, what does it mean? Is BTC going to "fall alone"?

My computer is running out of battery, so I will try to type it out and send it out. After Powell's speech in the early morning, the financial markets performed well, but BTC fell alone. I will briefly talk about my thoughts, of course, not to find a reason for the fall.
Just a personal opinion.

The main reason for BTC's decline this time is that in the risk market under the interest rate cut environment, BTC's liquidity was withdrawn in the short term, resulting in a short-term decline. This situation will be suspended after the US stocks, especially technology stocks, make up for the previous decline!

1. Positioning. BTC’s current positioning is vaguely defined between safe-haven and risky assets. This causes BTC’s positioning to be too vague at certain times, and as a result, BTC is not considered a priority asset in both risk-averse and risk-sensitive environments.

2. Among risky assets, if we compare BTC with the huge system of US stocks, BTC is more like a small-cap stock, more like the US altcoin sector. Liquidity entering the market often needs to make profits in the big market first, and then the profits generated will roll to small-cap stocks to use profits to gain higher risk returns. This is similar to BTC rising first, and then changing hands at high levels, and BTC profit funds gradually go to altcoins, thus bringing an active altcoin. This is all a process. Therefore, under the expectation of interest rate cuts, US technology stocks will rise first, and then wait until the increase is similar, and the people who bought them before will change hands at high levels to make profits, and then funds will flow into the crypto market.

3. In terms of stage, when did BTC go in the opposite direction of the US stock market in the recent two times? It was the decline of technology stocks, which led to the shrinking of the bubble. At the same time, technology stock funds flowed into small-cap stocks, such as Russell 2000, and then some funds flowed into cryptocurrencies, resulting in a very active crypto market during US trading hours.
In last night's rise, technology stocks led the gains, and the technology sector absorbed a large amount of liquidity. Although the Russell 2000 followed the rise, the increase was not large. It is obvious that risk funds are gradually returning to large-cap stocks again. Therefore, at this stage, small-cap stocks in the U.S. stock market and the crypto market cannot obtain market liquidity.
Therefore, BTC is moving in the opposite direction to the U.S. stock market.

4. Competition among small-cap stocks. If BTC is regarded as a small-cap stock, compared with the small-cap stocks in the Russell 2000, the Russell 2000 actually has better profit margins. It should be noted that most of the small and medium-cap stocks in the U.S. stock market are still at a low level in this bull market. At the same time, in the historical rise of small-cap stocks, once the economic environment is expected to be good and interest rates are loose, the increase in small-cap stocks is still very amazing.

On the other hand, although we believe that BTC can reach 100,000 or 200,000 in the future, 60,000 is not a low price at the current stage, and for some traders in the United States, they may prefer relatively centralized US stock companies at some stage. Therefore, after gaining enough confidence in the interest rate cut, it is actually a normal reaction to sell BTC appropriately to buy small-cap stocks or technology stocks.

5. The crypto market lacks a strong narrative recently. Compared with the expectation of interest rate cuts, the U.S. stock market will have more reference data and a more mature market environment, so it is not unusual for funds to flow into the U.S. stock market in the short term. Moreover, after the launch of ETFs, it provides more ways for traders in the U.S. trading area to intervene in the crypto market. It is also normal to arbitrage some of the previously profitable chips and turn to more flexible investment methods.

6. As the Asian markets were overly guided by U.S. trading sentiment, the early morning decline did not cause excessive panic in the Asian markets, but it did dampen the sentiment for active buying.

Summarize:
The above are my personal opinions. Maybe I cannot provide much evidence for many of them or I don’t have enough time to prove them. But I can expect that the decline of BTC is only temporary and phased. Although the technical trend is not good, the overall risk sentiment is still optimistic.

To verify whether what I said is right, we just need to see what happens next this week. If the non-farm data on Friday remains stable or positive, the funds chasing US technology stocks will gradually weaken after the continuous rebound, and then the weakened funds will slowly flow into the market through ETFs or encrypted funds. And BTC will also rise slowly. Of course, whether it can break through the previous high, I am not sure, but I think the market is unlikely to fall directly like this, it is more likely to rise and then fluctuate and fall.

In my opinion, in the early stage of the interest rate cut expectations, the US stock cryptocurrencies will rise for a while to consume the positive expectations, and then gradually fall back as the interest rate cut is gradually approaching. So the current#USstocksrise and BTC falls is just a step ahead of the US stock market under the strong narrative of AI.

#BTC☀ #ETH🔥🔥🔥🔥 $BTC

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