The Fed's hawkish rate cut triggers market turmoil, and price adjustments may present a rebound opportunity.
The Fed cut interest rates by 25 basis points yesterday, but the subsequent hawkish comments disappointed the market, suggesting a slowdown in the easing pace, leading to a surge in the dollar index. Powell's tough rhetoric caused global financial markets to face a 'Black Thursday,' with the stock and bond markets declining across the board, particularly Bitcoin experiencing significant drops.
However, regardless of whether this hawkish rate cut had an impact, the downward trend of prices was already destined to occur as it approached the 110,000 mark. As I mentioned earlier, prices would inevitably encounter resistance around 109,000. Although our expectation was around 109,000, a pullback occurred at 108,300, which is not much of a difference. Behind this sharp decline, the market is more using this event as an excuse for adjustments rather than being solely influenced by the rate cut.
In the short term, the market's retracement adjustment is healthy, and the trend will eventually welcome a rebound, with the long-term bullish trend still being clear. Just like after every major drop in the past, as long as there is patience, opportunities will surely arise. In fact, the drop this morning is an excellent entry opportunity, and investors with keen insight have already positioned themselves for long positions.
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