The Fed's rate cut caused market volatility, and the bull market potential of cryptocurrencies after the pullback remains strong
Yesterday, the Federal Reserve announced a 25 basis point rate cut and reduced its 2025 rate cut expectations from 4 to 2 times. This "hawkish rate cut" hit market sentiment and triggered a sharp pullback in risky assets. The S&P 500 fell 3% in a single day, the Russell 2000 small-cap index plunged 4.4%, and the price of Bitcoin rebounded slightly after falling below $99,000 from a high of about $106,000. At the same time, about $600 million of leveraged long positions in the crypto market were liquidated, further exacerbating volatility.
Short-term volatility, long-term bullish trend remains unchanged
This round of pullback is more of a short-term volatility and has not shaken the long-term bull market pattern of the crypto market. He believes that although the Fed's policies still have an impact on the market, the endogenous driving force of the crypto market is becoming stronger.
Four core driving forces are supporting the bull market in the crypto market:
The policy environment is warming: Washington's policies are gradually turning to support encryption, providing a good foundation for the development of the industry. Institutional investment is accelerating: ETF fund inflows have surged, and the trend of large institutions deploying Bitcoin has become more obvious. Government and corporate buying wave: Bitcoin is becoming an important choice for hedging inflation and diversifying asset allocation. Technological breakthrough: The breakthrough application of blockchain technology in multiple fields has injected confidence into the market.
Technical signal: The trend remains positive
From the technical indicators, Bitcoin's 10-day exponential moving average (about $102,000) is still higher than the 20-day exponential moving average (about $99,000), indicating that short-term market fluctuations have not changed the overall upward trend. This technical support has formed a resonance effect with the long-term bull market logic.
Market Outlook: Potential Opportunities in Adjustment
The current adjustment of the crypto market has provided a high-quality entry opportunity. With the influx of institutional funds, the realization of favorable policies and the continuous expansion of the blockchain ecosystem, Bitcoin and other crypto assets are expected to continue to set new highs in the medium and long term.
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