The bull market in the currency circle needs an engine, but the bull market in Bitcoin relies more on the support of liquidity.
Since the first interest rate cut by the Federal Reserve in September, although the balance sheet reduction is still ongoing, the Federal Reserve said that this will neutralize the liquidity release brought about by the interest rate cut, so it is currently in the neutral interest rate range. However, the general trend of interest rate cuts and quantitative easing is irreversible. With the end of the US election, the safe-haven funds in the market have gradually returned and began to provide more liquidity to the market. It is expected that at the Federal Reserve's interest rate meeting in December, the interest rate may drop by another 0.25 percentage points. At the same time, it is also possible to announce a slowdown in balance sheet reduction or even an end to balance sheet reduction, which will mark the start of the quantitative easing cycle and further boost market confidence.
In the long run, interest rates may continue to decline, and it is expected that they may drop to 3.25% or even lower by 2025. At this time, the market will continue to inject more liquidity, and both the stock market and Bitcoin are expected to continue to rise. As for when the peak of the bull market will come, it is difficult to predict accurately, but once the quantitative easing cycle ends and the M2 money supply begins to shrink, it will be a signal that needs to be vigilant. At that time, it is wise to avoid over-reliance on market fluctuations and take profits in time.
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