In the early morning of September 19, 2024, the Federal Reserve unexpectedly cut interest rates by 50 basis points, which undoubtedly exceeded market expectations. Along with this rate cut, Federal Reserve Chairman Powell also conveyed a more moderate attitude, emphasizing that the main purpose of the rate cut is to protect employment, and expected two more rate cuts in the next year. Such monetary policy changes have not only caused fluctuations in traditional financial markets, but also had a profound impact on the cryptocurrency market, especially Bitcoin.

Market Analysis

After yesterday's 50 basis point rate cut, Bitcoin rebounded as expected. Today, Bitcoin has reached $63,494. Next, focus on the pressure level of $65,000. The selling pressure here is very heavy. Be careful that there is a trap for you here and then another wave of longs. Next, focus on the support level of 62,000, followed by the support level of 60,000. As for Ethereum, it has now broken through the pressure level of 2,450. Next, it will touch the position of 2,550 to see if it can break through. To be honest, Ethereum is a bit bad and the rebound is not strong. It started at least at 2,700 at this time. Focus on the support level of 2,200 below Ethereum. The copycat still needs to wait patiently for Ethereum to not explode without large funds entering.

Will a 50 basis point rate cut be accompanied by a bull market?

First, it is an outdated idea to interpret a 50 basis point rate cut as a signal that the US economy is about to enter a recession. This argument is based on the assumption that the Fed has unfavorable information that the market is not yet aware of. However, the current weakness in the job market is an open secret, and the Fed does not need to reveal any new information to the market. Therefore, the focus of the Fed's actions is on how to deal with the current situation, rather than what to tell the market.

Secondly, if the Fed only cuts interest rates by 25 basis points, it may evoke painful memories of March 2022 in the market. At that time, facing the pressure of high inflation, the Fed only cut interest rates by 25 basis points. This conservative move failed to effectively deal with inflation, which led to a setback in market confidence and triggered large-scale market turmoil. This memory may make the market extremely sensitive to the interpretation of subsequent data. Moreover, since the Fed has no scheduled meeting in October, it means that they cannot make timely policy responses to new data. Powell is obviously aware of this, and he will not allow the mistakes of 2022 to happen again.

Therefore, the 50 basis point rate cut is not only a timely response to the current economic situation, but also a way to avoid market misunderstanding and overreaction to the Fed’s policies. This decision demonstrates the Fed’s sensitivity to market dynamics and its commitment to economic stability.

Now is the bull market. There are three stages in the bull market in the next two years.

Phase 1: Bitcoin is between $30,000 and $70,000. Most people don’t make money, and even lose money. Only the big bitcoin price goes up, not the individual coins. People gradually realize that Bitcoin keeps going up, while the altcoins we hold keep falling, right? A typical violent shock, a process of collecting chips, big investors are still frantically washing the market, BlackRock, Fidelity, and big institutions are still buying, so who will sell? Pull up, smash up, pull up, smash up

The second stage: 70,000-90,000 USD. Bitcoin just cannot effectively fall below 50,000 USD. Once the cycle is over, it will probably fall back by about 30%. In the second stage, no money can be made. Bitcoin falls, but the altcoin falls even more. Everyone is desperate again and sells at a loss. The main funds continue to pick up chips. At the same time, the high and low switches, and the high-selling in the first stage is switched to the currency that continues to hit a new low.

The third stage: 90,000~200,000 USD, the real main rising wave. Most coins can double, or even hundreds of times, the rhythm is not so cruel, there will be a sharp drop in the middle, but it is almost an upward trend, the center of gravity has obviously moved up, and the market will have a strong profit effect. It is also the time when we can make the most profit, because the main force has eaten up the chips, and it is enough to just pull it up.