The Federal Reserve announced a 50 basis point (2 bps) interest rate cut, ending a 2-year interest rate hike cycle and officially entering a rate cut cycle. Although this 50 basis point cut was somewhat beyond expectations, the Federal Reserve’s megaphone had already greeted everyone through Twitter two days ago, implying that the probability of the Federal Reserve cutting interest rates by 50 basis points is greater than 25 basis points, so the dot plot also shows that the probability of a 50 basis point cut is more than 60%. Therefore, the market did not continue to trade the 50 basis point recession expectations. On the contrary, with expectations factored into prices, it has gone through a vigorous rise. The Federal Reserve also cut 50 basis points, relying on the art of expectation management, and did not bring any panic to the risk market. It was really a wonderful play.
The start of interest rate cuts means that liquidity will be gradually released. Powell finally talked about a lot of data on unemployment and inflation, leaving uncertainty about subsequent interest rate cuts. But in any case, the sum of the last two interest rate cuts this year is currently 50 and 75 basis points. Therefore, we can be sure that the release of liquidity has begun, and over time, liquidity will improve significantly.
Today, the Asia-Pacific region opened with a general rise, and Europe is expected to be not too bad later. Looking at the cryptocurrency market, there has also been a long-lost general rise. These signals all indicate the expectations brought about by the improvement of the capital market in the future. So in conclusion, the future is bright, but the process is still tortuous.
Since Wall Street entered the market, the transaction difficulty of the entire market has increased rapidly, and the money-making effect has become extremely poor. It can even be said that it is only a bull market for Bitcoin and has nothing to do with other currencies. Recalling when the United States just started to raise interest rates in 2022, Bitcoin at that time also reached a high of US$69,000. After a round of interest rate hikes, Bitcoin created a new high of US$73,000. This means that even in an adverse situation, Bitcoin is still the most important incremental market in the world. Once the adverse situation turns into a favorable situation and interest rate hikes turn into interest rate cuts, then Bitcoin's strong return will eventually appear, because Bitcoin has become a consensus among people, but institutions and investors in many countries choose to wait and see this emerging asset. These capitals are the main force for the future rise of Bitcoin.
Regarding the current market situation, we still maintain our previous view that "the market will not go into a bear market unless it effectively falls below $50,000." Under such a macro environment, the probability of falling below $50,000 again is already very low. If the high point breaks through $70,000 again, it is very likely that the real main uptrend will start at any time. It has been fluctuating for more than half a year, and everything is possible.
The engine of the bull market cannot be seen only in Bitcoin. Only when Ethereum leads a group of small coins to make money, can a spark start a prairie fire. Otherwise, it is just a bull market for Bitcoin, and this bullish taste is accompanied by a hint of sadness. What is certain is that Bitcoin will definitely be bullish, while small coins need to wait for real liquidity to spill over.
The possibility of a U.S. economic recession, which the market is generally worried about, has become smaller, and the possibility of a soft landing is increasing.
The interest rate cut will have a lasting positive effect on risky assets. Although it may not be effective immediately, as time goes by and the interest rate cut continues, the liquidity of the market will begin to flow out of bonds, banks, etc. and flow into stocks, cryptocurrencies and other markets.
In addition, the upcoming US presidential election in early November this year will also bring short-term shocks to the crypto market. After the results are officially announced, off-market funds that have been waiting and watching may begin to continuously inject into the crypto market.
Which target to choose?
Generally speaking, in a big market, the first to be snapped up are high-quality targets, public chains, and leaders in various sectors.
The public chain is leading the rise today. In the future, the big cake ecology, AI, games, depin, RWA and other leading companies will most likely usher in their own market. You can select the target and wait for the opportunity to pull back and increase your position. If you don’t know how to choose, you can contact me, and I will choose the most suitable coin for you to hold according to your own situation.
Another option is to choose from the newly listed stocks. Speculate on new stocks instead of old ones. New stocks are easy to be over-speculated. Another option is to buy those stocks that are expected to be listed on bn and upbit, especially those with contracts but no spot. In addition, many projects in the bull market have started to do things (raise money), so you should pay attention to those event-driven stocks, such as generation B economics, economic model changes, 2.0, 3.0 upgrades, cross-border cooperation, large financing, and the establishment of large-cap funds. You can enter the market 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 happen overnight and the amplitude is often not small. Focus on spot trading, do fewer contracts, and try to exchange time for space.
