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01
Bitcoin is attempting to break through key support at $62,000 as markets digest a rare 0.5% rate cut from the Federal Reserve, which pushed the price of the digital currency to a three-week high.
This rate cut is the third time in the Fed's history that it has started a rate cut cycle by 0.5%. The market reaction that followed was very obvious, especially the liquidation of a large number of short positions. According to data, about $128 million of short positions were closed in 24 hours, which further exacerbated market volatility.
Although Bitcoin's price trend has temporarily benefited from the positive impact of the interest rate cut, investors need to be more cautious at this time. The market leverage is still high and there may be a risk of a pullback in the short term. Therefore, it is a wise strategy to appropriately reduce leverage or lock in part of the profit in case of large fluctuations in the market.
Although the market had expected the Fed's 0.5% rate cut to push Bitcoin to $64,000, the reality shows that bulls are still struggling to face the huge resistance above. Although Bitcoin is gradually breaking through the resistance level, there is still strong pressure above $62,500. If BTC can successfully break through this level, market sentiment will become more positive.
The volatility of the US dollar index (DXY) further influenced the price action of Bitcoin. Although DXY rose at one point, it quickly fell back to support. If it falls below this key level, the US dollar may see a larger decline, which may provide short-term support for risk assets such as Bitcoin. However, with the Bank of Japan's interest rate decision coming soon, the performance of the yen may also have an important impact on Bitcoin.
From a macroeconomic perspective, although interest rate cuts may bring more liquidity to the market, history shows that similar interest rate cut cycles have been accompanied by sharp corrections in the stock market. For example, the interest rate cuts in 2001 and 2007 both led to long-term declines in the market. Therefore, for the current market situation, I think investors need to be vigilant, especially when market sentiment is inconsistent with the actual policy effects, the risks may be underestimated.
In addition, the Fed's decision to cut interest rates by 50 basis points in the current economic context seems to contradict its statement on the strong economy. If the Fed really believes that the economy is strong as it claims, such a radical interest rate cut is not reasonable. This may mean that there are potential risks in the market that are not fully revealed. Therefore, future market developments still need to pay close attention to further changes in policy trends and market reactions.
02
Daily public account high-quality currency recommendations:
$ACH
Alchemy Pay is the world's most adaptable crypto payment infrastructure and the leading decentralized digital currency payment solution and technology provider in the Asia-Pacific region. It has developed Asia's first cryptocurrency and fiat currency hybrid payment solution, which can provide fast, secure and convenient aggregated digital currency and fiat currency payment technology solutions for more than one million online and offline merchants. Alchemy Pay is currently working on launching its second-generation decentralized payment system (ADPS2.0), integrating DeFi aggregation and the powerful Alchemy Trust system to open up a trusted authentication channel between centralization and decentralization. ACH is a token issued by Alchemy Pay to incentivize ecological, system access consumption and governance. The total amount is 10 billion, of which 51% will be mined through continuous payment and financial ecological behaviors after the launch of ADPS2.0.
Current price: 0.01948
IRIS Network (aka IRISnet) aims to establish a technological foundation to facilitate the construction of the next generation of distributed applications. By integrating a comprehensive service infrastructure and enhanced IBC protocol into the Tendermint & Cosmos stack, IRISnet enables service interoperability and token transfers across the Internet of Blockchains. As the core of IRISnet, IRIS Hub (aka IRIShub) will become the first regional hub connecting to the main Cosmos hub, making IRISnet an integral part of the entire Cosmos network.
Current price: 0.01496
DODO is a DeFi protocol and on-chain liquidity provider designed to provide better liquidity and price stability. Its Active Market Maker (PMM) algorithm uses highly accurate asset market prices to provide liquidity close enough to these prices to stabilize the portfolios of liquidity providers (LPs), reduce price slippage, and offset short-term losses by allowing arbitrage trading as a return. DODO also offers the Initial DODO Issuance (IDO) to meet the needs of new crypto projects and runs as an ERC20 token on the Ethereum network using smart contracts.
Current price: 0.1122
LOVE
Celestia is a modular blockchain that only orders and publishes transactions, but does not execute them. By decoupling the consensus and application execution layers, Celestia modularizes the blockchain technology stack and opens up new possibilities for decentralized application developers.
TIA is currently priced at 6.29u
