At 2 a.m. today (September 19), Powell announced that the benchmark interest rate would be cut by 50 basis points to a range of 4.75% – 5.0%, marking the start of a loose monetary policy cycle in the United States.
In addition to announcing the first rate cut in more than four years, the latest FOMC projections show the Fed will cut rates two more times in 2024, with the central bank expected to cut rates by a total of 100 basis points this year.
Interest rates are expected to fall further in 2025, with a forecast of 3.4%, with long-term rates bottoming out at 2.9%. This usually helps stimulate markets, as most investors tend to allocate to risky assets on the prospect of a return to loose monetary policy.
For BTC, this month it still maintains the pattern of falling at the beginning of the month and rising from the beginning to the end of the month. It is very important whether the height in the end of the month can exceed the high point in August. Once it exceeds, it will form a situation where the daily lows are getting higher and higher, and the highs are getting higher and higher for the first time, which will confirm that 4.9 is the bottom and 52500 is the second bottom.
The market unanimously believes that this 50BP rate cut is more symbolic than practical. Data from all aspects do not show any urgency, so it seems like a "pacifying rate cut."
Objectively speaking, interest rate cuts are definitely a good thing for the cryptocurrency market. There will be more opportunities, and some money is always better than no money.
Whether from the perspective of the risk-averse strategy of the transition from the old to the new order, or from the perspective of the United States flooding the market with money, there is no reason for gold and Bitcoin not to rise.
But this does not mean that you will definitely make money. I have said before that 2025 may be the last chance for grassroots to counterattack in the cryptocurrency circle, but most people will still end up with nothing in the end. I still hold this view now.
Just like the water level has dropped from the neck to the chest, the danger has decreased, but whether you can survive depends on yourself.
The only thing that is certain is that we are still in the bull market, and there is still the second half to play, provided that you have already laid out the core assets. If you don’t even have the capital to make a living, the second half basically has nothing to do with you.
You just need to remember that the rate cuts and elections will not change the bull market in the cryptocurrency world, they will only change the madness of the bull market! Keep holding!
The interest rate cut cycle is coming, how to play the next market?
Generally speaking, in a big market, the first things to be snapped up are high-quality targets. What are high-quality targets?
Public chain, the leader in each sector.
The public chain is leading the market today. Next, the big blockchain ecosystem, AI, games, depin, rwa and other leading companies will most likely usher in their own market conditions. You can screen targets and wait for opportunities to pull back and increase your positions.
How to choose based on market value?
Generally speaking, you should choose a medium-sized market value, preferably 100-1 billion US dollars. The space is large enough, and there is a certain bottom line and value support. In particular, 100 million US dollars is the threshold for a small dog to become a dragon.
It is not recommended to rush into all kinds of random local stocks and memes, especially those that are not listed on big exchanges. Instead, choose the leaders in the sectors with higher certainty.
Another option is to choose from the newly issued stocks. It is better to speculate on the new ones rather than the old ones. Secondarily issued stocks are very easy to be speculated. Another option is to choose those that are expected to be listed on bn and upbit, especially those with contracts but no spot.
In addition, many projects have started to do things in the bull market, that is, to pay attention to those event-driven tickets, such as generation B economics, economic model changes, 2.0, 3.0 upgrades, cross-border cooperation, large financing, the establishment of large-cap funds, etc., you can rush in at the first time, and the success rate is often good.
In a bull market, cherish the chips in your hands. The market will not change overnight, and the amplitude is often not small. Remember to focus on spot and stay away from contracts! Try to exchange time for space.
Back to Bitcoin, the current ETF, if we do not consider the possible suppression of cryptocurrencies by Harris in office, the trend should be a two-way superposition. First, the growth space of small market capitalization is no less than the safe-haven property of gold. Secondly, the high linkage with the risk market US stocks are all factors that drive the bull market. Bitcoin is likely to go bullish. Finally, due to the unrest in the world, people's risk aversion needs have increased, and the consensus of Bitcoin cannot be compared with gold. It is also difficult to achieve the goal of near-zero interest rates in 2020 by cutting interest rates in the next year. Therefore, it is difficult to replicate the frenzy of the risk market in the last bull market. Bitcoin should go out of a long bull market rather than a violent bull market.
As for other altcoins in the blockchain, whether it is the cooling of the world's speculative nature, or Bitcoin intercepting new leeks in ETFs, coupled with the lack of revolutionary nature of the altcoin market itself, it is almost impossible to see the situation of small volume, few gambling tables and many gamblers in the last round of bull market. The linkage between altcoins and Bitcoin remains, but this time from the perspective of more than 2 years, Bitcoin's long bull attribute compared to gold's low market value may not be less than the altcoins in the bull market. This time, Bitcoin is even more king.
in conclusion
It is worth mentioning that October is a strong month in history! Bitcoin has achieved strong positive returns in the past 9 years, except for October 2018 due to the bear market. From 2015 to 2023, it has achieved strong positive returns.
In the second half of 2023, Bitcoin has been rising since October, and the expected approval of the Bitcoin spot ETF has ushered in a new bull market. And the fourth quarter after the halving event has also been bullish. If history repeats itself, it may bring amazing returns that most people can't imagine.
The Fed’s decision to start cutting interest rates will likely be the first in a series of consecutive rate cuts. Many expect this move to continue until 2025. In a recent speech, Powell said he believes inflation has been overcome. However, there is still a long way to go to make up for the high interest rates of the past few years. As interest rates continue to fall, it will be important to track the behavior of Bitcoin.
The interest rate cut cycle has begun, and the next market trend is clear, it just takes time to develop, so don’t miss the opportunity!
