Many friends asked me why Bitcoin can still fall by five percentage points a day when the interest rate is about to be cut. First of all, everyone needs to understand why the market will cut interest rates? Simply put, the market is not doing well, the economy is going to have problems or has already had problems, and the essence of interest rate cuts is to save the market. Whether it is a defensive interest rate cut or a recessionary interest rate cut, the intensity is the only difference.
Therefore, the decline before and after the interest rate cut is normal. At this time, the market will not increase liquidity because of the news that has not yet landed, but it is between the gradual arrival of traditional capital risks and the market's upcoming injection of liquidity. This will cause the market's uncertainty to increase at this point in time, and then ease the market panic with the increase in liquidity, and finally V-reversal will break out.
In the previous bull market cycle, every time before the general rise, it will be sideways at a high level for about three months, and this time it has been sideways for nearly six months. I think the long time of high-level adjustment is not because the market is not doing well, but because the consensus in this circle has become stronger, and the influence of the crypto market has also increased. Therefore, to achieve the effect of the previous wash, the wash cycle must be infinitely extended, so that the early firm holders will choose to exit.
