The impact of interest rate cuts on the Bitcoin market is often misunderstood. Many investors expect that a rate cut will immediately trigger a bull run, but history and reality provide a different perspective. A rate cut itself does not immediately inject liquidity; rather, it signals a change in trend, and the actual flow of funds takes time.
Looking back, the market performance in 2008 and 2019 shows that after interest rate cuts, the market usually experiences a decline before it starts to find a bottom. The cryptocurrency market also needs to wait for an overall increase in risk appetite before it can follow suit with an upward trend. Even in 2020, Bitcoin did not surge on the day of the interest rate cut; it only began to rebound several months later, as a result of quantitative easing policies, fiscal stimulus measures, and the massive expansion of M2.
Currently, the market has priced in the possibility of a rate cut in September. When Federal Reserve Chairman Powell confirms this, a so-called 'sell the news' phenomenon may occur: there could be a short-term decline, and the market will go through a period of confusion, after which the real upward momentum will emerge. It is worth noting that September has traditionally been one of the worst-performing months for risk assets, and the combination of rate cuts with this seasonal factor may exacerbate market risks.
The future market trend may show the following sequence: after interest rate cuts, Bitcoin may first experience a decline, triggering panic among retail investors and shifting market sentiment to bearish. However, at this point, 'smart money' may begin to accumulate positions. Ultimately, Bitcoin is expected to move towards a target of $90,000, although few may believe it during this process.
The core factor driving the next round of market activity is triggered by interest rate cuts, but it does not take effect immediately. The low yield environment may prompt capital to flow out of the bond market, a weaker dollar may make Bitcoin an attractive hedging tool again, and the growth in stablecoin supply may provide more liquidity for other cryptocurrencies.
In terms of market rotation, Bitcoin may lead the rally first, followed by Ethereum, and finally, other cryptocurrencies will see explosive growth. This process is similar to the market cycle of 2020, but it may progress more quickly.
For investment strategies, it is advisable to layout in advance rather than chase hot trends. Stay calm during market downturns and accumulate Bitcoin and Ethereum positions at key price levels. Once Bitcoin breaks through $90,000, consider laying out other cryptocurrencies. At the same time, be cautious of emotional fluctuations on social media and avoid blindly following trends at market peaks.
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All-InQueen
· 09-06 06:50
Be patient and wait for the right moment to get on board.
The impact of interest rate cuts on the Bitcoin market is often misunderstood. Many investors expect that a rate cut will immediately trigger a bull run, but history and reality provide a different perspective. A rate cut itself does not immediately inject liquidity; rather, it signals a change in trend, and the actual flow of funds takes time.
Looking back, the market performance in 2008 and 2019 shows that after interest rate cuts, the market usually experiences a decline before it starts to find a bottom. The cryptocurrency market also needs to wait for an overall increase in risk appetite before it can follow suit with an upward trend. Even in 2020, Bitcoin did not surge on the day of the interest rate cut; it only began to rebound several months later, as a result of quantitative easing policies, fiscal stimulus measures, and the massive expansion of M2.
Currently, the market has priced in the possibility of a rate cut in September. When Federal Reserve Chairman Powell confirms this, a so-called 'sell the news' phenomenon may occur: there could be a short-term decline, and the market will go through a period of confusion, after which the real upward momentum will emerge. It is worth noting that September has traditionally been one of the worst-performing months for risk assets, and the combination of rate cuts with this seasonal factor may exacerbate market risks.
The future market trend may show the following sequence: after interest rate cuts, Bitcoin may first experience a decline, triggering panic among retail investors and shifting market sentiment to bearish. However, at this point, 'smart money' may begin to accumulate positions. Ultimately, Bitcoin is expected to move towards a target of $90,000, although few may believe it during this process.
The core factor driving the next round of market activity is triggered by interest rate cuts, but it does not take effect immediately. The low yield environment may prompt capital to flow out of the bond market, a weaker dollar may make Bitcoin an attractive hedging tool again, and the growth in stablecoin supply may provide more liquidity for other cryptocurrencies.
In terms of market rotation, Bitcoin may lead the rally first, followed by Ethereum, and finally, other cryptocurrencies will see explosive growth. This process is similar to the market cycle of 2020, but it may progress more quickly.
For investment strategies, it is advisable to layout in advance rather than chase hot trends. Stay calm during market downturns and accumulate Bitcoin and Ethereum positions at key price levels. Once Bitcoin breaks through $90,000, consider laying out other cryptocurrencies. At the same time, be cautious of emotional fluctuations on social media and avoid blindly following trends at market peaks.