Bitcoin is still maintaining a volatile trend, with two key price levels to watch: $59,000 and $62,800.
If Bitcoin can steadily break through $59,000, it will mean that the short-term downward trend may end; if it further breaks through $62,800, it will confirm the establishment of a long-term upward trend, which may herald a continued rise for several months.
On-chain data shows that despite the decline in Bitcoin since August 26, there has been a massive outflow of BTC from all exchanges in the past two weeks, totaling 80,000.
At the same time, the stock of stablecoins in exchanges exceeded the peak on August 30, and the selling pressure gradually subsided. Currently, only 40,000 BTC remain unmoved.
The eight-day losing streak of Bitcoin ETF has ended, and the market is rebounding! If there is a rebound, you must be on board!
CPI may be the highlight tonight!
Pay attention to the CPI data release at 8:30 tonight! Whether the data is lower or higher than expected, there is a positive potential: the extent of the interest rate cut will determine whether it is 50 points or 25 points.
- Positive probability 60%: If the data is lower than expected, Bitcoin is expected to rebound to $60,000.
- Negative news probability 40%: If the data is higher than expected, there may be a one-day correction in the short term, but the impact on the overall situation will be limited.
Last week, the US economic data performed poorly, the sluggish manufacturing industry dragged down the US stock market, and the share prices of many technology giants fell by more than 10%. The market's expectations for interest rate cuts are getting higher and higher, and it is eager to usher in good news as soon as possible!
Before the policy decision on the 18th, the market will enter a silent period, and the launch of altcoins often occurs after the price of Bitcoin rises. At this time, capital will choose a direction. When the market trend is neither up nor down, the market is actually betting on the future trend.
Now, we are waiting for the finality of the US dollar trend. If this week's data reinforces the market's expectations of a 25 basis point rate cut by the Federal Reserve in September, there may be an over-hype of rate cut expectations in the short term, and the US dollar index may strengthen further.
Currently, the market's expectations for a 25 basis point or 50 basis point rate cut are wavering, and market sentiment is extremely unstable, which may lead to increased randomness in global market trends.
Therefore, the current ups and downs and liquidations are all normal. The key is to keep your funds safe. Only with funds in hand can you seize future opportunities! Don’t worry too much about other things for the time being.
The fourth quarter of 2024 and the first quarter of 2025 may become a great opportunity window for Bitcoin for the following reasons:
1. Potential for interest rate cuts: Although this interest rate cut will not trigger quantitative easing, market capital activity is expected to increase, bringing more capital inflows to Bitcoin.
2. Impact of the election: In this election, some presidential candidates have publicly pledged to support cryptocurrencies, which will inject a shot in the arm to the market.
3. Halving effect: Although there is no evidence that the halving effect will not occur, historical experience shows that halving usually drives up Bitcoin prices.
4. New FASB rules: Starting from December 2024, the new FASB standards will take effect, at which time cryptocurrencies will be allowed to adopt fair accounting standards, which is expected to boost market confidence.
It is worth noting that on April 19, 2024, Bitcoin experienced its fourth halving. In the past, the price of Bitcoin tended to rise after halving, but after this halving, the price of Bitcoin unexpectedly fell, and the market generally worried whether the halving effect would fail.
In addition, Bitcoin's market share has peaked, and funds have begun to flow into altcoins. After this wave of adjustments, the fourth quarter is likely to become a season for small altcoins to explode.
Today is destined to be an exciting day!
First of all, the first presidential debate between Trump and Harris is about to begin, and this showdown will undoubtedly attract the attention of the entire financial market, especially the cryptocurrency field.
The debate between Trump and Harris will directly affect the poll results, but based on current data predictions, this may not be the last debate, and we will most likely see a new showdown before the general election on November 5.
Secondly, the CPI data will be released at 8:30 tonight, which will have an important impact on the Fed’s interest rate decision on the 18th. Although last week’s employment data attracted market attention, this time the CPI data will be more critical.
Judging from the current crude oil futures prices and five-year inflation expectations, the CPI results are likely to show a positive side. The downward trend in oil prices is expected to reduce inflation expectations, thus bringing benefits to interest rate cuts.
Let us wait and see! The tide of the big cycle is mighty and powerful. Those who follow the trend will prosper, while those who go against the trend will perish. Opportunities always come to those who are prepared!
Let’s talk about the impact of the Fed’s interest rate cut on Bitcoin’s trend:
Next Thursday, the Federal Reserve will hold a key interest rate meeting, which may mark the first loose monetary policy shift in recent years. The decision of this meeting will undoubtedly have a profound impact on the trend of Bitcoin. The following is an analysis of the possible impact of this meeting:
Expectations and market reaction
Expectations of interest rate cuts: The market generally predicts that the Federal Reserve will cut interest rates by at least 25 basis points, and there is even a 50% chance of a 50 basis point cut. The interest rate cut will increase market liquidity, and capital may flow from low-risk assets to high-risk assets, including Bitcoin.
Market reaction: The expectation of rate cut has been digested by the market to a certain extent. If the rate cut is in line with expectations, market volatility may be relatively stable. However, if the rate cut exceeds expectations, or the speech of Fed Chairman Powell reveals more unexpected information, the market may react more strongly.
The correlation between Bitcoin and US stocks
Current Status: Recently, Bitcoin’s performance has been highly correlated with the Nasdaq, showing that it is viewed as a high volatility asset rather than a safe haven, especially after the opening of a Bitcoin ETF.
Possibility of decoupling: Unless there is a global emergency (such as war, sanctions, etc.), Bitcoin may continue to move in line with the US stock market. In particular:
1. Global emergencies: If international tensions or other major events occur, Bitcoin’s attributes as a safe-haven asset may be released. In this case, Bitcoin may break away from the trend of US stocks and become an independent investment product.
2. Good news or bad news in the cryptocurrency world:
- Big positive news: For example, Trump’s victory or the introduction of new policies that are beneficial to the cryptocurrency industry.
- Major negative factors: For example, the negative market sentiment that may be triggered by Trump’s defeat.
Let us wait and see how the Fed’s decisions will shape the future market landscape!
Forward-looking analysis of Bitcoin trends
Long-term benefits: The interest rate cut cycle is expected to last 2-3 years, which will significantly increase market liquidity and form long-term positive support for Bitcoin. Bitcoin is poised to benefit from this positive trend as capital flows into riskier assets.
Short-term impact: If the rate cut is in line with expectations, Bitcoin may not experience sharp fluctuations in the short term. However, if the rate cut is unexpectedly 50 basis points, it may trigger a rapid rise in Bitcoin, although the probability of this situation is low.
The future trend is full of expectations, and every step of interest rate cuts may bring new opportunities for Bitcoin!
The uniqueness of this market cycle: the bull market has not really started yet
The current market cycle is very different from previous ones, and it is particularly unusual in terms of the dominance of Bitcoin and altcoins. In the past, the crypto market usually went through the following process:
1. Bitcoin dominance rises during bear markets.
2. In the early stages of the bull market, Bitcoin's dominance continues to increase.
3. As the bull market matures, investors begin to invest their funds in high-risk assets, and altcoins enter a "hot season".
4. Eventually, Bitcoin’s dominance begins to decline and the altcoin market rises.
However, this time things are different. Bitcoin has been dominating the market since the last bear market and currently accounts for 57% of the total market capitalization of the crypto market. We are experiencing an atypical market cycle, and the real bull market has not yet arrived. The current market is still a bull market for Bitcoin, and the bull market for altcoins is still on the way.
In this cycle, investing in altcoins needs to be more cautious than ever. It is not naive to think that holding "zombie coins" that lack product-market fit and real driving force will bring tenfold returns. The market competition is becoming more and more fierce, and making wise choices in time is more critical than waiting!
