Overnight, the news that the US cut interest rates by 50 basis points was everywhere. This topic has been a hot topic for half a year. I have written many articles about this matter before. In fact, this is also expected.
People always get excited after an event, but the market is anti-human. Today we will review the market and the progress of events in the past six months.
Is 50 basis points a lot? Actually, not much.
Last night, the Federal Reserve started a rate cut cycle, lowering the federal funds rate by 50 basis points to 4.75%-5.00%, the first rate cut since March 2020. In fact, it is only a 0.5% cut! 50 sounds like a lot, but it is actually not the case!
The market's expectation for a total rate cut in 2024 is 1%, and there is currently an expectation of 0.5%, or 50 basis points. The next interest rate meeting will be in November. Let's take a look at what Powell said.
Fed Chairman Powell said at a press conference that there is no indication in the forecast that the Fed is rushing. If appropriate, the Fed can speed up, slow down, or even pause rate cuts. If the economy remains solid, we can slow the pace of rate cuts. Similarly, if the labor market deteriorates, we can respond. Our forecasts are not plans or decisions, and we will adjust policies as needed. Taking into account the risks, we cut interest rates by 50 basis points today, and this adjustment will help maintain the strength of the economy and the labor market.
From a cyclical perspective, this is indeed the first 4-year interest rate decline cycle for the U.S. dollar. But will the market continue to rise? Especially from last night to today, everyone is calling for a crypto bull market.
When was the last time you heard people shouting about the crypto bull market? It was when Trump was assassinated, and then the market rose to $70,000. What happened next? On Black Monday on August 5, Bitcoin fell from $70,000 to $49,000.
So if we go back further, when was the time when everyone was shouting "bull"? It was March or April this year.
Now, the sound this time is more similar to that in March and April at the beginning of the year.
There will be some exciting market rises in the future, similar to the performance after the Trump incident, or the performance after the Trump incident. But this will not last long.
We have written many articles about interest rate cuts, and analyzed the reasons and impacts of interest rate cuts from a data perspective, such as: After reviewing the previous interest rate cuts, the US stock market plummeted? ! Crypto assets are in turmoil?
Powell will give an important speech tonight. What will happen next if the crypto bull market restarts?
PPI is lower than expected. With the highly expected Fed rate cut, will the crypto market soar? Recent market analysis
The Federal Reserve is about to cut interest rates! The United States launches a proposal for a strategic Bitcoin reserve!
Why is no one talking about the Fed’s interest rate cut suddenly?
The United States will have a major impact on cryptocurrencies tonight!
50 basis points will not lead to accelerated outflow of the US dollar. It is just a policy to stimulate the US domestic economy. 5% is not enough to make money active. It is just a signal. When the interest rate falls to 4% or lower, hot money will act. But will it definitely come to the crypto market? This is a big question mark.
Of course, this is a good thing, that is, the interest rate cut cycle is at least better than the interest rate hike cycle. It will not suck away money. It is mild for the market. You will not panic, and the market will become active, and better gains will appear.
Let’s review our past predictions about the market.
Historical article: Bitcoin is at 55,500, can we buy at the bottom?
On September 4, we predicted that Bitcoin would rise to 62,000. Today, this price has reached it. I still hold this view, and this is a pressure range. If it continues to rise, it can be considered after breaking 65,000.
Going back a little further, an article from mid-August: Good news, hold on, coin brothers! Undercurrents are surging, and a big rise seems to be coming!
At that time, we thought the market would reach around 66,000, but in fact the market stalled at 65,000. That is, our judgment on the descending channel at that time was in line with the trend. The characteristic of a descending channel is that the top gradually decreases.
Regarding the second half of the bull market, it will continue. However, the market is not a straight line but a curve, and these second-curve fluctuations have a huge impact on assets.
And this time, we have done more research on the underlying logic and fluctuation patterns of the project. There are more references for the underlying logic of coin selection and high and low fluctuations!
Everything is going well right now, but prices are experiencing a local high, so don’t be happy too soon!
(The crypto market is volatile, this is just a sharing of opinions, not investment advice)
