At 2 a.m., the Fed cut interest rates by 50 basis points. It is expected that the Fed will cut interest rates twice more by the end of the year (by 25 basis points each), with a total reduction of 100 basis points this year. Powell also reiterated in his speech after the meeting that there is no sign of recession in the US economy. Increasing interest rate cuts is just to make up for the lack of interest rate cuts in July. The 50BP interest rate cut + the Fed's claim that the economy is not in recession is the best result of the market's previous interest rate cut forecast. Therefore, we also saw that the US stock market and the market circle rose rapidly at the moment the interest rate cut results were announced, "but the market subsequently turned to fall
For BTC, this month it still maintains the pattern of falling at the beginning of the month and rising from the beginning to the end of the month. It is very important whether the height in the end of the month can exceed the high point in August. Once it exceeds, it will form a situation where the daily lows are getting higher and higher, and the highs are getting higher and higher for the first time, which will confirm that 4.9 is the bottom and 52500 is the second bottom.
The market unanimously believes that this 50BP rate cut is more symbolic than practical. The data from all aspects do not show the urgency, which seems to be a "pacification rate cut".
September 19th Cryptocurrency Market Analysis
Macro Aspects
After the interest rate decision was announced, the US stock market fell rapidly, but Bitcoin strengthened independently. There were certain differences in market funds. Judging from the price trend of risky assets, the 50 basis point interest rate cut did not trigger widespread panic about the recession in the market.
After the interest rate decision was announced, Powell held a press conference and delivered a speech. His speech was still mainly focused on controlling recession expectations. He emphasized that the current labor market is still stable and inflation has eased to a certain extent. However, if the interest rate is cut too quickly, it may hinder further easing of inflation. The pace of subsequent interest rate cuts still depends on the next economic data.
The FOMC meeting dot plot shows that the expected interest rate at the end of 2024 is 4.4%, and the expected interest rate at the end of 2025 is 3.4%. According to this dot plot, there will still be a 50 basis point interest rate cut this year, with a high probability of 25 basis points in November and 25 basis points in December.
This round of interest rate cuts is likely to keep the neutral interest rate at around 3%, which signals to the market that the US economy will remain strong and there will be no recession in the next one or two years.
Regarding ETFs, on September 19, the U.S. Bitcoin spot ETF had a net outflow of $52.83 million, and the Ethereum spot ETF had a net outflow of $9.74 million
At present, the 30-day average supply of Bitcoin by short-term holders has dropped to the level of 2012, indicating that a large number of tokens have flowed into the hands of long-term holders. However, this indicator is not the lower the better. The growth of short-term holders is the driving force of the bull market. If this indicator can grow rapidly in the future, the price of Bitcoin is likely to rise sharply.
Market conditions
There is no problem with the right-side trend of Bitcoin. The upper pressure level is around 64,000. Before an effective breakthrough, it cannot be determined that Bitcoin has resumed its upward trend within the oscillation zone.
There is a high probability that this position will fluctuate in the short term. It is not easy to achieve success overnight as the market demand is not yet strong to such an extent.
The large-scale high-level shock structure is still there, and the position is waiting for strong demand to intervene. ETH is still weak and the exchange rate is deviating from the daily line, waiting for an oversold rebound
In terms of cottage
A large number of copycats have seen strong growth, but not many have clearly come out of the bottom. The ones with relatively good short-term patterns include SUI, TIA, PENDLE, SEI, etc., which are all projects with good fundamentals. Those who built positions and covered positions at the bottom should now have certain profits. Let's see how long the capital heat lasts. If the funds in the market continue to be active, there may be a wave of market conditions.
Other events that require attention
CZ will be released from prison next week:
On September 16, according to the official website of the U.S. Federal Bureau of Prisons, a 47-year-old Asian man named "Changpeng Zhao" will be released on September 29, 2024.
UNI has been fully unlocked, with an actual circulation rate of approximately 25.83%:
On September 17, on-chain analyst Yu Jin posted on the X platform that UNI tokens have been fully unlocked and are now in full circulation. Since its launch in September 2020, the team, investors, consultants, and community treasury have received a total of 83% of UNI allocations, which will be gradually unlocked over a four-year cycle.
Sui Lianchuang:
Cooperation with Circle, USDC will soon be launched on Sui network: On September 17, Mysten Labs CEO Evan Cheng announced that Sui network has reached a cooperation with Circle, and USDC will soon expand to Sui ecosystem
