After the Federal Reserve cut interest rates by 50 basis points yesterday, the loose monetary policy boosted market sentiment, and U.S. stocks and crypto markets all rose.

After the volatility triggered by the initial rate cut subsided, Bitcoin bulls began to gain momentum, with BTC pushing from the $60,000 support level to an intraday high of $63,903, before retreating to $62,771 at press time, a 24-hour gain of 4.11%.

Altcoins saw impressive gains, with dozens of the top 200 tokens by market cap seeing double-digit gains.

Before the U.S. stock market opened today, cryptocurrency concept stocks rose, with Coinbase up more than 3% and MicroStrategy up more than 4%.

The rate cut is rare and the market reaction is confusing

Historically, the Federal Reserve's large-scale interest rate cuts have often led to economic growth, stimulated inflation, and given rise to asset bubbles.

This time, the Federal Reserve announced a 50 percentage point interest rate cut, an adjustment rarely seen in history. Bank of America had previously warned that a 50 basis point interest rate cut "makes no sense, is difficult to communicate, and could trigger a risk aversion shock."

Based on asset performance during several historical cycles of large rate cuts, I expect that three months after the Fed cuts interest rates by 50 basis points, the S&P 500 index will be basically unchanged, but small-cap stocks will rise sharply, technology stocks will perform well, value stocks will outperform growth stocks again, the US dollar will rise, metal prices will soar, and the yield curve will show a bull market steepening trend.

The Fed will continue to cut interest rates in the future, and the beginning of the Fed's easing cycle often "coincides with poor performance of risky assets."

Pay attention to the subsequent rate cut rhythm and the US election

I mentioned earlier that the Fed may continue to cut interest rates, but it is not known whether it will be a 50 basis point cut like yesterday or a 25 basis point cut.

The extent of the Fed's interest rate cuts has become a hotly debated topic during this Fed rate cut cycle, as it is associated with the question of "whether the U.S. economy is in good shape."

The rate cut is welcome news, but I think that the fact that they cut it so much suggests that the economy is in a very bad state. Either the economy is in a very bad state, or they are playing politics, there are only two possibilities.

According to Powell at the press conference that day, there is currently no indication that the possibility of a downturn in the US economy is high.

It may take two or three quarters for economic growth to rebound after the first rate cut, making it uncertain whether the U.S. economy can avoid a recession.

It is worth noting that the phenomenon of "US recession" will also affect the subsequent price trend of Bitcoin. It is expected that if the US economy avoids recession and maintains a controlled slowdown path, Bitcoin may retest its previous historical highs.

Next, let’s analyze the market situation in the next few days.

Bitcoin has already taken off halfway up the mountain, while Ethereum altcoins are still on the ground. Compared with Bitcoin at 62,000, Ethereum should be at 2,600 or even higher.

After Ethereum and altcoins make up for the rise for 2-3 days this week, Bitcoin and Ethereum altcoins will collectively pull back next week. Bitcoin daily support is 59500 and 57500, and the monthly line will be closed at the end of the month. Then the main upward trend will be in the autumn market in October. Therefore, if the market has a small correction in the next 3 days, you can make up for the rise of Ethereum or altcoins in these few days, and then wait for BTC and ETH to pull back together at the end of next week before doing the unilateral daily rising trend in October. The month-end correction is for the unilateral surge in October.

Which coins are worth investing in?

The following are the coins that I think are worth investing in. If you also have specific coin recommendations, you can bring them later. If you don’t know where to get on or off the bus, you can contact me and we can do it together.

BE

SEI’s price has outperformed all top 100 cryptocurrencies, surging to $0.337, up 25% in just one day. This impressive rally has recently made SEI one of the best performing altcoins.

TON

Although Toncoin has not yet entered the meme coin craze, its ecosystem is expanding and once the gaming and meme markets align, it will achieve significant growth. Toncoin is trading at $5.79 and has a market cap of $14.67 billion!

BUT

Formerly known as Fetch AI, ASI is a pioneer in the integration of artificial intelligence and blockchain. This altcoin will take advantage of the growing interest in artificial intelligence technology, especially as the market recovers from previous losses. With innovative applications and partnerships, ASI can reap significant returns.

BABY

Pepe has surged in popularity within the meme coin category, benefiting from community engagement and social media buzz. Its high volatility and speculative trading potential make it a candidate for high returns, especially as meme culture continues to influence the cryptocurrency market.

Although these stocks have yet to gain momentum, they will hit new highs once the bull run begins in early 2025.

It is really not easy to speculate in cryptocurrencies. Generally speaking, choosing value coins for long-term holding is the best strategy. It is very easy to lose everything after speculating for a long time. It is better to hold on to high-quality chips. With interest rate cuts and monetary easing in the next two years, good days are not far away. Everyone holding high-quality chips is expected to have an average return of 5-10 times in two years.