On September 19, Beijing time, the Federal Reserve officially announced that it would cut the federal funds rate by 50 basis points to 4.75%-5.00%, which was the first rate cut since March 2020. Under the influence of the rate cut news, the crypto market surged, and BTC broke through $62,500, outperforming U.S. stocks and spot gold.

What is most worth looking forward to is that experts from multiple institutions have stated that the 50 basis point interest rate cut in September is just the beginning, and it is possible that interest rates will continue to be cut throughout the year, and the cumulative interest rate cut may reach 76 basis points by the end of 2024.

The Fed will continue to cut interest rates in the coming months

This rate cut far exceeded the market's general forecast of 25 basis points, directly cutting interest rates by 50 basis points. Powell emphasized at the press conference that he did not think that the sharp rate cut indicated that the US economy was approaching a recession, nor that the job market was on the verge of collapse. The rate cut was more of a preventive action aimed at maintaining the "robust" status quo of the economy and the labor market.

After the dust settled, the market generally expected that interest rates would continue to be cut in November and December. It is expected that there will be another 70 basis points of interest rate cuts this year. The published dot plot suggests that there will be another 50 basis points of interest rate cuts this year.

The possibility of a U.S. economic recession, which the market is generally worried about, has become smaller, and the possibility of a soft landing is increasing.

The interest rate cut will have a lasting positive effect on risky assets. Although it may not be effective immediately, as time goes by and the interest rate cut continues, the liquidity of the market will begin to flow out of bonds, banks, etc. and flow into stocks, cryptocurrencies and other markets.

In addition, the upcoming US presidential election in early November this year will also bring short-term shocks to the crypto market. After the results are officially announced, off-market funds that have been waiting and watching may begin to continuously inject into the crypto market.

The current spot market trading volume is still in a downturn, and generally fluctuates around US$60 billion. Apart from the short-term sudden fluctuations caused by special macro events, the market liquidity is still mediocre.

Bitcoin has increasingly become a macro asset that reflects overall economic trends. As liquidity continues to be injected into the market, the crypto market may be able to shake off the past haze.

In view of the current market situation, the market needs more wash chips. Next, a new week of wash chips will begin. Retail investors should remember to grab the chips and then start a big surge.

Gold, U.S. stocks, and U.S. Treasury bonds rose after the policy statement was released, but fell after the Powell news was released. Gold rose 1.2% to $2,600 at one point, but then gave up the gains and hit the lowest price we calculated that day, 2,546, as Powell warned the market not to take the 50 basis point rate cut as a new rhythm.

No matter what, the interest rate has been cut, and the easing cycle has finally officially begun!


It is difficult to judge how the short-term trend will develop at present, but I believe that the next three or four months will definitely see a copycat bull market.

Seeing the market rising, are you anxious to buy in? I tell you not to be anxious, I will give you the opportunity to buy in full, but I am afraid that you will not dare to buy in at that time.

There is a serious disharmony in the long-short ratio of BTC now. If the market drops to 60,500, more than 300 million long users can be liquidated. Although the current market conditions have changed from before, the overall focus is still on liquidating contract positions on the market. The price must at least reach 60,500 once.

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The performance of altcoins will be very important in the future. The differentiation between strong and weak will become more and more obvious, which also means that our ability to select coins will be put to a higher test, and we should choose altcoins with hype expectations.

We must have a strong sense of sector awareness and closely follow the direction of hot money.

After catching a wave of market trends, quickly move to ambush the next possible hot spot, and in this way, continue to grow your funds.

Generally speaking, in a big market, the first things to be snapped up are high-quality targets. What are high-quality targets?

Public chain, the leader in each sector.

The public chain is leading the market today. Next, the big blockchain ecosystem, AI, games, depin, rwa and other leading companies will most likely usher in their own market conditions. You can screen targets and wait for opportunities to pull back and increase your positions.

Will the market see a surge after this rate cut?

Here is an intuitive data: the changes in the U.S. stock market from 3 months to 6 months or even 1 year after the first interest rate cut by the Federal Reserve.

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We can see that except for 1973, 1981, 2000 and 2008, the US stock market has soared to varying degrees one year after the rate cut. The four times it fell were the oil crisis in 1973, the Internet bubble in 2000, the subprime mortgage crisis in 2008, and the not-too-serious Reaganomics fiscal deficit crisis in 1981. The first three times can be said to be bailout-style rate cuts. In short, they were a last-ditch effort to remedy the situation.

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The last interest rate cut cycle in 2019 was also a relief-style cut, but there was no sharp drop in prices, but rather a sharp rise.

Historically, the other type of interest rate cut is a defensive one, which always leads to a rise in the market. Obviously, we have not yet experienced a huge economic crisis this time, but there are only signs of an economic recession. As mentioned at the beginning, the large scale of the interest rate cut this time is defensive, so we can generally predict that the US stock market will also rise this time.

On the whole, gold will generally rise immediately during the rate cut cycle, but because its volume is already large enough, the room for appreciation is limited. Generally, the increase will be more limited in the second half and after the rate cut. The bail-out-style rate cut is usually the cause of the rate cut, but it will rise later. In the defensive rate cut, it can generally bring about a rise in the U.S. stock market in the short term and a sustained long bull market in the U.S. stock market in the long term.

Let’s get back to the cryptocurrency world.

Let's talk about Bitcoin first. It has just passed the ETF. If we don't consider the suppression of cryptocurrencies by Harris in office, the trend should be a two-way superposition. First, the growth space of small market capitalization is no less than the safe-haven property of gold. Secondly, the high linkage with the risk market US stocks are all factors that drive the bull market. Bitcoin is likely to go bullish. Finally, due to the unrest in the world, people's risk aversion needs have increased. The consensus of Bitcoin cannot be compared with gold. It is also difficult to achieve the goal of near-zero interest rates in 2020 by cutting interest rates in the next year. Therefore, it is difficult to replicate the frenzy of the risk market in the last bull market. Bitcoin should go out of a long bull market instead of a violent bull market.

As for other altcoins in the blockchain, whether it is the cooling of the world's speculative nature, or Bitcoin intercepting new leeks in ETFs, coupled with the lack of revolutionary nature of the altcoin market itself, it is almost impossible to see the situation of small volume, few gambling tables and many gamblers in the last round of bull market. The linkage between altcoins and Bitcoin remains, but this time from the perspective of more than 2 years, Bitcoin's long bull attribute compared to gold's low market value may not be less than the altcoins in the bull market. This time, Bitcoin is even more king.