Yesterday the market tried to sprint to 58,000, but failed to go up, and formed another "needle". At present, it is not difficult to see that the daily line is still in a sideways trend. What we need to pay attention to is that if the market continues to try to break through this week but fails to break through, then we must pay attention to the risks again.
It is not difficult to see during this period that the performance of SOL and its series is still relatively satisfactory, while the overall performance of Ethereum and its series is not good. If the market falls a little, Ethereum will fall faster than anyone else. However, I personally believe that this "phenomenon" is only temporary.
Characteristics of past bull markets:
1. BTC and ETH both broke through the historical highs of the previous bull market, which marks the official start of the bull market.
2. The daily K-line prices of Bitcoin and Ethereum deviate from the 60-day moving average by more than 30%, and the 60-day moving average continues to rise. This means that investors who entered the market at different time periods have made profits.
3. The 30-day, 60-day, 120-day, and 200-day moving averages are dispersed, indicating that chips have begun to be dispersed and the market has a significant money-making effect.
4. Exchange activities are frequent, and project owners take advantage of the situation to issue new projects and seek to sell them at high prices.
5. The friend circles and group chats are full of stories about showing off profits and getting rich overnight. Investors are in high spirits and eager to get rich overnight.
6. The market value of Bitcoin has dropped to about 30%, the market value of altcoins has soared, and market risks have gradually accumulated.
7. The trading volume and turnover rate are extremely high, and the market is active.
8. The Ethereum Foundation began to sell currencies frequently, and its wallet assets gradually flowed into exchanges.
9. Good market news keeps coming out, stories emerge one after another, and each story is unique and charming.
This round of atypical bull market will no longer follow the above script, but the only thing that remains unchanged is that those who take a long-term view, ignore short-term corrections, focus on the bull market cycle, and hold on will be the winners.
Those who only pay attention to the ups and downs in history are picking up sesame seeds and throwing away watermelons.
Can this round of interest rate cuts pull Bitcoin back into the bull market?
Expectations for this round of rate cuts
Entering the third quarter of 2024, the US domestic market showed signs that monetary policy may need to be adjusted. Data such as unemployment rate, employment, and wage growth showed a decline in market activity, a decline in technology stocks, and a slowdown in economic growth. The US still has a huge amount of outstanding debt interest. All signs indicate that the Fed needs to cut interest rates to promote consumption, revitalize the economy, and issue excessive currency. Before Black Monday, the market generally predicted that the Fed might start cutting interest rates as early as September this year.
According to market expectations, Goldman Sachs had previously predicted that the Fed would cut interest rates by 25 basis points in September, November and December, and pointed out that if the August employment report was weak, a 50 basis point cut in September was possible. Citigroup also predicted that interest rates might be cut by 50 basis points in September and November. Economists at JPMorgan Chase adjusted their forecasts, believing that the Fed might cut interest rates by 50 basis points in September and November, and mentioned that an emergency rate cut might be made between meetings.
After Black Monday, some radical analysts believed that the Fed might take action before the September meeting, with a 60% chance of a 25 basis point rate cut, which is extremely rare and is generally used to deal with serious risks. The last emergency rate cut occurred at the beginning of the epidemic.
However, there is still great uncertainty in the global economic trends, including the US economy. Major institutions have different views on whether this round of interest rate cuts is a preventive cut or a relief cut. The impact of the two on the market is also very different, and further observation is needed.
Will interest rate cuts directly benefit the crypto market?
Although many people believe that interest rate cuts will increase market liquidity, reduce borrowing costs, and may push up cryptocurrency prices, and that in an environment of interest rate cuts, economic uncertainty will increase and investors may turn to safe-haven assets such as Bitcoin, there are also reservations that we need to be wary of potential economic recession risks.
However, in the short term, the interest rate cuts by global central banks, represented by the Federal Reserve, are a shot in the arm for the global financial market and the crypto market. There is no doubt that the expectation of interest rate cuts will directly promote the increase of market liquidity, trigger market optimism, and is expected to prompt the cryptocurrency market to usher in a wave of rising prices in the short term, bringing investors opportunities for quick profits.
In the long run, the trend of the cryptocurrency market will be affected by more complex and changeable factors, and price fluctuations are not driven by just a single factor, which requires comprehensive analysis.
Secondly, inflation factors need to be considered. The central bank cuts interest rates to stimulate the economy and promote consumption, but it may also lead to inflation risks such as rising prices. Then rising inflation will in turn lead to the central bank raising interest rates, which will bring new pressure to the crypto market.
Third, the US election and global regulatory changes also have far-reaching impacts. Who will be the new US president? What policy the new president will adopt towards encryption is still unknown.
In short, the interest rate cuts initiated by central banks around the world have undoubtedly brought new opportunities and challenges to the crypto market. The interest rate cuts will most likely provide liquidity support for crypto assets in the short term, which includes factors such as increased liquidity and increased risk aversion demand.
