After the market expects a rate cut, prices tend to fall first and then rise, which is particularly evident in the cryptocurrency market. Here are the reasons:
Fluctuation of market consensus: Price fluctuations in the crypto market usually revolve around the formation and collapse of consensus. The expectation of a rate cut usually attracts widespread attention in the market, but when this expectation becomes widespread, the market may fall first.
This abnormal trend is sometimes due to excessive speculation by market participants in advance.
Strategies of fund managers: Smart fund managers usually do not re-enter the market to push up prices immediately after the rate cut is announced. Instead, they may wait for the market to break a key support level to find a more favorable entry point.
This strategy not only reduces risk, but also obtains higher returns after the market pulls back.
Opportunities for market adjustments: Initial market declines are often intended to attract investors who hold coins and wait and see or smart money to re-enter the market.
This decline creates more favorable conditions for subsequent increases, as capital inflows drive prices up after the market regains confidence. 👉 Follow me to view the simplicity of the main coconut and start your wealth journey! 🚀
Therefore, the market's initial decline after the rate cut may actually be accumulating momentum for a potential rise, laying the foundation for a subsequent price recovery.
