The countdown to the Fed's interest rate cut is on! Bitcoin is about to trigger a massive 30% shock, the final showdown between bulls and bears in the last quarter!

Current Crypto Market: Moving steadily through complex narratives Each cycle in the crypto market has a new story. Nowadays, market signals are no longer simple; they result from a combination of various narratives interwoven, such as Fed policies, U.S. Treasury interest rates, macroeconomics, and geopolitical factors, leading to continuous fluctuations. Market Outlook: Short-term volatility and medium to long-term opportunities Short-term (more than 1 month): The market may experience phase fluctuations again. This could trigger panic among some investors, but for others, pullbacks or fluctuations provide entry opportunities. Medium-term (Q4): Despite the uncertainty of Fed policies and the inflation risks in the U.S. that may lead to changes in capital flows, we remain optimistic about the opportunities in Q4. Long-term: The volatility of the crypto market is no longer solely dominated by institutional and large-cap funds; it is also closely related to the health of U.S. Treasuries. If there is a significant shift in U.S. economic expectations, the market may face more severe and prolonged volatility cycles. Bitcoin: Volatility is converging, waiting for directional choice.
Since the beginning of this year, Bitcoin has been surprisingly "calm", with no single month experiencing an increase or decrease of over 15%. With only four months left in the year, there is a high possibility of a single month experiencing fluctuations of 15% or even over 30%, although it is difficult to predict the exact timing. Regardless of the bullish or bearish sentiment, the fourth quarter could be an important time for positioning.
1. Core Driving Forces: Interest Rate Cuts, Inflation, and the Fed's "Tightrope Walking". Fed Chairman Powell's recent speech appears to be "dovish" (hinting at interest rate cuts), but is actually very nuanced.
His core point is: interest rate cuts are necessary, but the timing and pace depend entirely on future economic data. A rate cut does not mean the start of a loosening cycle. The Fed's new goal: it clearly emphasizes the need to decisively bring inflation back to 2%, which is a "hard target" that must be achieved, and it will no longer tolerate prolonged high inflation. The current dilemma:
The U.S. economy appears contradictory: there are signs of a rebound in inflation, while the job market is slowing down, and the burden of government debt is increasing. The Fed has less and less room to maneuver between curbing inflation and maintaining economic growth.
Key Risks:
If the market begins to doubt the Fed's determination or ability to achieve the 2% inflation target (for example, due to political pressure or debt issues leading to compromise), it could trigger a chain reaction: traditional assets (such as bonds and stocks) will be repriced. This uncertainty will enhance the appeal of "alternative scarce assets" like Bitcoin and gold as hedging tools. This could lead to greater volatility in the crypto market and extend the volatility cycle.
2. Institutional Play: The Cycle Game of U.S. Treasuries, Leverage, and Bitcoin Institutions represented by MicroStrategy (MSTR) are important drivers in this cycle. Their core strategy is: borrowing money (leveraging) to purchase a large amount of Bitcoin. How do they finance? Issuing convertible bonds (borrowing): The interest rate is linked to U.S. Treasuries. When interest rates are low, they can borrow money to buy coins at a very low cost. Investors purchasing these bonds are essentially betting that MSTR's stock price (which follows Bitcoin) will rise, allowing them to earn more money than the interest. Issuing new shares (selling stock): Raising new funds by issuing additional shares when the stock price is high, but this dilutes the shares of existing shareholders. How does this cycle operate?
Stock price rises → Issuing more stocks or bonds for financing → Buying more Bitcoin → Driving further increases in both coin prices and stock prices. As long as the increase in Bitcoin is greater than the interest cost of the money they borrowed, they can earn arbitrage profits. Potential risks:
This model is closely related to U.S. Treasury rates. If in the future there is a situation of "rate cuts but rising inflation expectations," it may lead to long-term rates rising instead of falling. Financing costs will increase, squeezing arbitrage space. The market demand for high-premium stocks like MSTR may weaken. Once this leverage cycle can no longer continue, it may trigger large-scale liquidations, thereby exacerbating the volatility in the Bitcoin market. In the short term, as long as the price of Bitcoin remains stable or rises, this game can continue, and it may even be mimicked in other cryptocurrencies (such as ETH).
Opportunities to make money exist not only in a bull market. Bull markets are suitable for cashing out, while volatility itself is the eternal source of opportunities. The key is to actively leverage volatility, rather than passively waiting for prices to rise. The BTC Daily provided a successful short position at 111900-112900! Currently, pay attention to short opportunities at 112100-112500! Stop loss above 112900! Target 110200-109350! At the same time, pay attention to accumulation buying opportunities here, with a target above 112000 and a stop loss below 109350!

ETH Daily gave a short position at 4620-4680 that worked! Another profit of over 100 points! Currently, there's a short opportunity at 4570-4605, target 4430-4400, stop loss above 4660!

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