Why is it said that the bull market is now halfway through, not over? Why is it accompanied by danger in the middle?
Factors supporting the bull market trend:
After the ETF was passed, the influx of the first round of funds led to a sharp rise in the market, which made long-term funds and leveraged funds profitable. It is indeed time to adjust and digest. The car is too heavy. ETF funds are long-term funds and a continuous process. The inflow in the first stage is temporarily suspended, and there is potential new funds in the later stage. After all, many large financial institutions have not yet promoted on a large scale.
The crypto market gives people the feeling that the ecology is still "eager to try", especially now that NFTs, runes, L2, etc. related to the Bitcoin ecology are very active. It is not ruled out that there will be a new round of ecological prosperity. After all, SOL's meme ecology can be hyped so fiercely, and the potential imagination of the concepts in the Bitcoin ecology is also very large.
In addition, it is only a matter of time for the Federal Reserve to cut interest rates, and it is inevitable to continue to flood the market. The market value of Bitcoin at $66,000 is about $1.3 trillion. If this volume continues to rise, it will inevitably require a larger amount of funds. Therefore, the core factor driving the market in the second half still depends on when the United States will actually flood the market. The driving force of ETFs alone is limited.
Dangerous reasons: The current market is weakening, and funds have become cautious. A big reason is the trend of US stocks. Since the US stock market rose sharply driven by the outbreak of Nvidia AI, it now shows signs of weakening, and even the decline is "accelerating".
Especially the Fed has repeatedly postponed interest rate cuts, and market funds are also worried about the economic recession. After all, most of the Fed's interest rate cut cycles in history were forced to be implemented after a crisis. Will it repeat the same mistake this time? There are also concerns. However, rapid interest rate cuts also have risks. The Fed has raised interest rates and shrunk its balance sheet for two years, but because of its "risk-free" interest rate of up to 5.5%, global funds have poured into the United States for "arbitrage". Liquidity is sufficient and violates financial common sense, so the market has risen over the past year.
However, arbitrage funds have a lot of leverage. If the interest rate is cut quickly, the arbitrage leverage may be blown up, which will cause liquidity to quickly deplete and bring risks. The current market funding rate has turned negative for the first time, which may indeed indicate that the "critical moment" is coming.I hope the market will create a golden pit to take everyone on board and drive to a bright future.
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