After the Fed cut interest rates, Bitcoin rose from $59,000 to $63,700, and many people began to ask whether a bull market is coming. But I think this is just a small bull market, or a band market. Especially in the context of interest rate cuts, funds flow back to the market, and the liquidity of the market becomes sufficient, and many altcoins may gain momentum for growth.
However, from a historical perspective, since 1980, every time the Fed raises interest rates to more than 5%, the risk of financial crises rises. It is worth noting that crises often break out not during interest rate hikes, but during subsequent interest rate cuts. For example:
In 1980, the interest rate was raised to 21%, and in 1982, the interest rate began to be lowered, which triggered the Latin American debt crisis;
In 1988, the interest rate reached 9.75%, and after the interest rate was lowered in 1989, Japan's economic bubble burst;
In 1994, the interest rate rose to 6%, and in 1995, the interest rate began to be lowered, and then the Asian financial crisis of 1997 broke out;
In 1999, the interest rate rose to 6.5%, and the IT bubble in 2000 was punctured during the interest rate hike;
In 2004, the interest rate was raised to 5.5%, and in 2007, the interest rate was lowered, which led to the subprime mortgage crisis in 2008.
Back to the present, the Federal Reserve began to raise interest rates in March 2022, and by August 2023, it had raised interest rates to between 5.25% and 5.5%. According to historical laws, the possibility of a financial crisis between 2024 and 2026 is very high.
My judgment is that with the return of funds to the market, the Bitcoin market is expected to rise to $75,000-77,000 in the next 1-2 months. However, the risk of financial crisis is gradually increasing, especially considering that the current US debt has reached $57 trillion. As the attractiveness of national debt decreases, once the thunder breaks out, it will be a huge thunder, and the market may pull back to the range of $38,000-48,000. This pullback may lay the foundation for the next round of bull market.
My suggestion is that the current wave of rising market can be appropriately participated in, and a 2-3 week rising cycle is expected. Investors can sell some chips at high levels and wait for the price to fall back to the range of $38,000-48,000 before making a layout. It is necessary to remind everyone that the trend of the currency circle is full of uncertainty and challenges, but also contains potential opportunities. Investors should fully understand the relevant risks, remain calm and rational, and respond to market changes with a sound strategy.
