The "password" of the cryptocurrency circle and the Bitcoin bull market: liquidity dominates the trend

In the ever-changing cryptocurrency circle, the rise of a bull market often requires a strong "engine" to drive it, and many factors work together to ignite market enthusiasm and push up the price of the currency. However, the logic of the Bitcoin bull market is relatively "pure", and its core driving force mainly comes from the abundance of liquidity.

Looking back to September, the Federal Reserve cut interest rates for the first time. According to its official statement, the balance sheet reduction action is still continuing. The effects of one reduction and one reduction offset each other, and the current interest rate remains neutral. Despite this, the general direction of the market trend is clear. The interest rate cut and the gradual move towards quantitative easing are like an arrow from a string, which is difficult to reverse. With the November election coming to an end, the funds that were previously dormant due to fear of election fluctuations have returned to the market like a tired bird returning to its nest, and the drops have gathered into a "living water" of liquidity, quietly moistening the market soil.

In December, the Federal Reserve's interest rate meeting has attracted much attention. At that time, the interest rate is likely to drop by another 0.25 percentage points. More importantly, it is very likely that the Fed will announce a slowdown in the process of shrinking the balance sheet, or even directly press the "stop button" to end the shrinkage. This move is tantamount to blowing the "charge" of the quantitative easing cycle, and market confidence will be instantly injected with a "heart shot", which will be greatly boosted. Looking forward to the follow-up until 2025, interest rates will continue to decline, with the target of 3.25% or even lower. Massive liquidity will continue to rush into the market "river", and asset fields such as the stock market and Bitcoin will be like ships with sails raised, leveraging the upward force to start a magnificent bull market journey.

Although the peak of the bull market is like a treasure hidden in the fog and it is difficult to accurately predict the exact moment of its appearance, there is a clear "signal light" that cannot be missed - once the quantitative easing cycle ends and the total money supply M2 begins to shrink, it is a warning that the market is about to "change its face". At this moment, you must not be greedy for the "last piece of pie". Decisive profit-taking and safe "landing" is the best choice for wise investors.