The interest rate decision is coming, and a 50 basis point rate cut is very likely not to increase, but to fall sharply. If you plan to buy spot after the rate cut, perhaps this article can reduce your losses.

Let's talk about the short-term view first.

Most people expected a 25 basis point rate cut before, but last Friday Nick, who is known as the Fed's "messenger", issued a post hinting that the rate cut may be 50 basis points.

It is also because of the impact of this news that Bitcoin has started to fall for three consecutive days.

This can be regarded as a "lesson from the past". If the rate cut is really 50 basis points tonight, perhaps the crypto market will also fall sharply in response.

Moreover, if the rate cut is too large, it will instead indicate the severity of the economic recession. Even if there will be a subsequent rise, it is likely to fall first. As I said in my previous article, many people think that the larger the rate cut, the greater the rise, which I do not agree with.

On the contrary, if the rate cut is 25 basis points, I think there is a high possibility of a short-term rise.

First of all, the market expectation has always been 25 basis points, and it usually rises if it meets expectations. Secondly, the market previously predicted that the probability of 25 basis points was the highest, but now the probability of 50 basis points is higher. If the probability of "hitting" is smaller, the rise will be easier. (It should be noted that the concepts of "expectation" and "prediction" are different)

Finally, let's talk about the long-term view.

Take the last interest rate cut cycle as an example. Bitcoin has been falling throughout the cycle. The sharp rise brought about by the interest rate cut often does not come too quickly. It takes time for the economy to slowly pick up, or even until the next interest rate hike cycle. What long-term investors need more is patience.