This year, the markets are behaving quite unpredictably, breaking all past correlations.
Let’s remember that we are currently in a cycle of declining key rates in developed countries. Historically, during such periods, markets fall rather than rise as they are doing now.
The logic is linear and clear:
High key rate -> expensive loans.
And expensive loans are serious: less money for consumers -> companies earn less -> companies save more -> lay off employees -> less money for consumers 💸
When the key rate is cut, the market falls because cheap loans are not going to the markets, but to heal the wounds.
But this year, the markets are positively reacting to each cut in the US key rate.
This means only one thing, there is a lot of money in the system, which helps keep the markets afloat and even grow 🐂
🔭 Just look at the picture.
Blue lines are the days of the FOMC meeting.
As you can see, during the period when the key rate remained unchanged$BTC it traded within a sideways range.
But after each cut in the key rate, Bitcoin began to rise.
Today at 22:00 MSK, there will be an FOMC meeting where the decision on the key rate in the US will be announced.
Right now, the crypto market is preparing for this event, so the overall market mass is not growing.
However, the market is pricing in a 95% probability of a 0.25 point rate cut.
Logically, after the FOMC meeting, a new wave of market growth should begin.
And if they cut the rate by 0.5 points right away, we will see big green bars on the market ↗️
🐻 But if the market is already pricing in a rate cut of at least 0.25 points, why aren’t we growing?
It’s all because traders are waiting for the Fed Chair's speech to find clues in his words.
It is the Fed Chair today who will set the direction for the markets for the next month.
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