This month, as the Fed meeting approaches, market sentiment has quietly warmed up, like a spring breeze, sweeping away the previous haze. On September 17, BTC was like a wild horse that had broken free from its reins, advancing for two consecutive days from below $58,000, and unstoppably broke through the $61,000 mark. When the heavy news that the Fed announced a substantial interest rate cut landed, the cryptocurrency market seemed to have ushered in a long drought and all worries and uncertainties disappeared in an instant. BTC was even more powerful, performing an extremely rare feat of six consecutive positive daily lines, with an impressive weekly increase of 7.52%, and the price approaching $65,000, demonstrating a strong recovery momentum.
The surge in the price of the coin is like a shot in the arm, effectively responding to all doubts and challenges. ETH is not far behind, rising straight up from the low of $2,150 to a new high of $2,600, and the FUD sentiment has finally been effectively alleviated. It is particularly worth mentioning that since the ETH/BTC exchange rate hit a three-year bottom, it has shown amazing resilience, strongly regaining lost ground and returning to above 0.04, heralding a full return of market confidence. As a leader, AAVE broke through the $180 mark in one fell swoop, setting a new high since May 2022, and many altcoins followed closely behind, adding considerable vitality to the market.
Good news continues to come. US presidential candidate Harris has also publicly stated that if she is successfully elected president, she will help increase investment in AI and cryptocurrency. The total market value of the crypto market has once again rebounded to above $2.2 trillion. Recently, the total daily transaction volume of the crypto spot market has exceeded $80 billion, more than double the lowest point of $40 billion in June.
In terms of on-chain data, the total market value of stablecoins exceeded US$172.2 billion, reaching a new high since May 2022, with a weekly increase of more than 0.5%. CryptoQuant CEO Ki Young Ju posted on social media that "institutions are no longer shorting Bitcoin aggressively. Net positions in CME futures have fallen by 75% in the past five months."
In addition to Bitcoin and Ethereum, which sectors are worthy of investors' attention?
1. Layer 2 Solution
As blockchain technology continues to develop, Layer 2 solutions are gaining attention for their ability to significantly increase transaction speeds and reduce costs. Projects such as zkSync, Optimism and Arbitrum may become new favorites in the market.
2. Cross-chain technology
Cross-chain technology allows different blockchain networks to communicate and exchange value with each other, which is essential to building a more interconnected cryptocurrency ecosystem. Projects such as Polkadot, Cosmos, and Avalanche have potential in this area.
3. Decentralized Finance (DeFi)
DeFi has performed well in the past bull market, and with more innovation and increasing user demand for decentralized financial services, DeFi projects such as Uniswap, Aave, and Compound may once again become the focus of the market.
4. Metaverse and Gamification Platform
The rise of the metaverse concept has brought about interest in virtual worlds and gamification platforms. Projects such as Decentraland, Axie Infinity, and The Sandbox provide users with immersive virtual experiences and may attract more attention in the bull market.
5. Privacy protection and security projects
As users pay more attention to privacy protection and asset security, projects focusing on privacy and security such as Monero, Zcash, and Aleo may gain more favor among users.
6. Green and Sustainable Cryptocurrency
As environmental issues receive increasing attention, green and sustainable cryptocurrencies such as Ethereum 2.0, Cardano, and Tezos may be favored by the market due to their more environmentally friendly consensus mechanisms.
China's central bank follows the Federal Reserve in cutting interest rates!
The dollar's status as a world currency and its tidal effect have made central banks around the world tread on thin ice and dare not act rashly. The first interest rate cut by the Federal Reserve on September 18 gave countries a chance to breathe;
After the Fed’s first rate cut, the People’s Bank of China introduced heavy-duty reserve requirement ratio cuts, interest rate cuts and real estate stimulus policies; Hong Kong stocks, A shares and Chinese concept stocks soared;
The central banks of the European Union, the United Kingdom, Canada, Australia, South Korea, India and other countries will follow suit and accelerate interest rate cuts in the fourth quarter to boost the economy.
Under the trend of interest rate cuts, precious metals, commodities, and emerging market assets will benefit from the increase, and risk assets represented by BTC will also rise;
Impact and opportunities of the Chinese market:
The rebound of China's stock and property markets will also enhance the liquidity position of the Chinese, an important investment group in the cryptocurrency circle; it is good for BTC, and the opportunities for the altcoin and local dog altcoin season will also come;
Don’t think that crypto assets have nothing to do with us now. Capital flows globally, so one of the great things about BTC as a global currency hedge asset is that no matter who prints money, it will ultimately be beneficial to it, and the larger the size and the more money is printed, the greater the benefit.
Therefore, the market has expectations for the Federal Reserve to cut interest rates, but it should be completely unprepared for such a domestic interest rate cut.
Therefore, this is likely to be the key external factor for Bitcoin to trigger a violent bull market in the medium term. Of course, BTC also has its own endogenous driving force and the support of other exogenous forces.
