Let me first state the conclusion:
1. If the interest rate is cut by 25 basis points, there will be certain benefits.
2. If the interest rate is cut by 50 basis points, it may fall first and then rise.
3. Looking back at 2019, we are now in December 2019, and there may be a wave of rising prices next.
4. In addition to paying attention to the Federal Reserve, we should also pay attention to Japanâs interest rate decision tomorrow.
5. There may still be some twists and turns before the main bull market wave begins.
â€The Fedâs rate cut decision tonight
Previously, it was believed that a 50 basis point rate cut would be a remedy for the economic recession. Most people expected a 25 basis point rate cut, which is a good or bad thing, but a 50 basis point cut is considered a bad thing.
On September 13, Nick, known as the mouthpiece of the Federal Reserve, tweeted that the interest rate might be cut by 50 basis points.
As a result, expectations for September began to tilt toward a 50 basis point rate cut.
The next day, BTC began to fall for three consecutive days, from $60,000 to around $57,000, and then returned to around $60,000 again.
â If the interest rate is cut by 25 basis points
Compared with the previous market expectation that there was a high probability of a 25 basis point cut in September, there is now a greater probability of a 50 basis point cut.
However, letâs look at the marketâs expectations for November:
Unless the Fed cuts interest rates in September and then pauses or slows down its rate cuts in January, the market's expectations for November are:
52.5% believe that the interest rate will be cut by 25% in September and 50% in November.
27.6% believe that the interest rate will be cut by 50% in September and 50% in November.
20.1% believe that the interest rate will be cut by 25% in September and 25% in November.
So on the whole, a 25% or 50% interest rate cut in September is possible.
If the interest rate is cut by 25%, it means that the Federal Reserve is not very worried about the economic recession, which will be a certain positive.
â If the interest rate is cut by 50 basis points
If the rate is cut by 50 basis points, it means that the Fed has begun to respond to the economic recession. However, the Fed may also use some language to reduce expectations of recession.
Brother Fengâs view is that it will first fall and then rise.
Since Nick started tweeting, BTC has rebounded after falling for 3 consecutive days. This may be a preview of a 50 basis point rate cut if it is announced tonight.
†Carving a boat
Although many friends despise Kezhou, but:
It peaked in June 2019, and then began to fluctuate downward.
It will reach its peak in March 2024 and then begin to fluctuate downward.
The comparison results show that as time goes by, this year's trend is indeed getting closer to 2019.
It is undeniable that history has implications for the market and expectations. Kezhouâs logic is that the market has experienced a three-wave decline (can also be seen as a four-wave decline) just like in the second half of 2019, and the market has expectations for a rebound, especially a bull market.
If we look back to 2019, we are now in the stage of December 2019. There will be an uptick in the market, and a black swan similar to March 12 may appear later.
†Donât be happy too soon
â Short term
Note that Brother Feng's judgment is bullish in the short term. In the short term, we also need to pay attention to Japan's interest rate decision tomorrow. Once Japan raises interest rates, funds will flow to Japan, which will also affect the speculative market related to US stocks.
â Mid-term
Next, if we stick to the old ways, a black swan will appear in March 2020, causing a sharp drop. The market is about to enter the early stage of interest rate cuts. According to the Fed's past history of interest rate cuts, there is a high probability that a black swan will appear at the beginning of interest rate cuts after sustained high interest rates. Although it is not certain to happen, we should be cautious.
Comparisons other than carving a boat:
In addition to the similarities between Kezhou 2019 and 2024, we also need to compare the differences:
âą First, when falling, 2024 is more likely to be a pin (purple). This is probably because the 2024 market is more sensitive to macro, political, and international relations factors.
Analysis: If a black swan similar to 312 appears, the market should be more sensitive and the spike should be longer than 312.
âą Second, looking at the Binance chart, the transaction volume in 2024 is larger than that in 2019. This transaction volume is based on the coin standard, not the U standard. If it is based on the U standard, the transaction volume in 2024 will be larger.
The trading volume on August 5, 2024 is almost the same as that on March 12, 2020.
Analysis: Although the trading volume on August 5 was similar to that on March 12, 2020, this year's trading volume is generally larger. The market may not have enough confidence to take over on August 5, and it may not have fallen through.
âąThird, there were several waves of decline in 2019, and finally there was a period of sideways consolidation. However, the decline of the last wave in 2024 was still not small. And it seems that a new wave is starting an upward trend.
Analysis: The market may go through another wave before the big bull market begins.
âą Fourth, the decline in 2019 was at the beginning of the interest rate cut. The decline in 2024 started before the interest rate cut.
Analysis: The market started to fall before the rate cut, which is somewhat similar to 2000 or even 2008. The market is now in the recession period. Market sentiment will not recover so quickly, and the bull market may not start so quickly after the rate cut in 2024.
â€Written at the end
In general, there is a set of contradictions in the market, that is, the contradiction between bullish sentiment and the macro environment:
On the one hand, the cryptocurrency market has entered the fourth quarter of the third year of its four-year cycle, and sentiment is relatively high.
On the other hand, the macro market led by the United States is in the early stages of interest rate cuts and market liquidity remains tight.
Do you still remember Brother Fengâs point of view - emotions determine the low and funds determine the top.
Under this logic:
Sentiment is high, and the bottom may not be too low, unless there is a black swan. Since it is a black swan, it is difficult for us to predict it. If we leave some bullets for the black swan, the remaining positions may reach a stage where we can be more optimistic.
Global liquidity is relatively insufficient, so don't have too high expectations for the highs of this wave. When expectations of economic recession have not yet subsided, if there is particularly high sentiment in the currency market, you can consider reducing your positions appropriately.
Supplement: There may be relatively drastic fluctuations from tonight to tomorrow, so it is not recommended to open contracts randomly.
