Interest Rate Cut Expectations and Altcoin Market: Prelude to a Bull Run or the Beginning of the Peak?While the market anticipates a potential interest rate cut in September by the US Fed, the positive impact of such a policy might not be immediately visible. This is especially true as global economic uncertainty casts a shadow, prompting investors to adopt a cautious stance, waiting for the actual effects of the interest rate cut to materialize in the market
Interest Rate Cut Expectations and Altcoin Market: Prelude to a Bull Run or the Beginning of the Peak?
While the market anticipates a potential interest rate cut in September by the US Fed, the positive impact of such a policy might not be immediately visible. This is especially true as global economic uncertainty casts a shadow, prompting investors to adopt a cautious stance, waiting for the actual effects of the interest rate cut to materialize in the market. So, for the crypto market, does the September interest rate cut expectation signal the arrival of a bull run?
Historically, the altcoin market has displayed varying performance during the cyclical fluctuations of the crypto market. While the entire market tends to experience a surge during a bull run, altcoins often lag behind due to their inherent volatility and high-risk nature. Consequently, September could be viewed as a prelude to a bull run rather than its peak.
Bearish factors remain: continued Mt. Gox BTC sell-off pressure, escalating conflict between Iran and Israel. Early this morning, a Mt. Gox wallet address transferred 0.0199 BTC, a pre-transfer test before a large-scale transfer. Mt. Gox still holds approximately 50,000 BTC awaiting release in batches. This week also brings two significant events:
1. Thursday, 9:45 PM (EST) US August PMI
2. Friday, 10:00 PM (EST) Powell Speech
The general trend is definitely upward, though there will be fluctuations along the way. It will take at least 1-2 weeks to absorb the selling pressure from Mt. Gox tokens. After 10 years, the removal of this major threat will be a significant boon to the crypto market.
Bitcoin Holds the Potential to Replicate Its Performance in 2017 and 2021
Historically, Bitcoin's price has surged fourfold whenever it has crossed the 200-week moving average (MA). The 200MA is a widely used technical analysis tool that helps identify the long-term trend of a cryptocurrency. This indicator is usually employed to ascertain whether the trend is bullish or bearish. Generally, when BTC rises above the 200MA, it indicates potential price growth and suggests that the bull run is still intact. Conversely, a drop below the 200MA indicates that a long-term bull market may not yet be confirmed.
In a chart shared by PlanB, he highlighted the bull run of 2017, when BTC briefly dipped below $4,000, illustrating how such movements can impact market sentiment. By the peak of the cycle, Bitcoin's price surged to $17,760. Fast forward to the 2020-2021 bull run, where Bitcoin was trading around $15,560 in November 2020, only to skyrocket to $69,000 a year later.
Interestingly, in each phase of every cycle, BTC has experienced a period of quietude, during which the price has undergone consolidation and adjustments. However, ultimately, a significant price surge ensues. History rarely repeats itself, but patterns tend to resemble each other. If past trends serve as a guide, then BTC's recent surge to $73,750 might not signify the peak of this cycle. The bull run might still have more room to grow.
The Final Washout Phase, the Trajectory of the Bull Run is Evident!
During this washout pullback, institutional whales have been accumulating Bitcoin in large quantities once again. Previously, I shared data charts showing whale accumulation, which reached a peak similar to the 2020 bottom accumulation phase. Plans change rapidly, do you still maintain the view that Bitcoin will continue to decline? From the bottom to the present, I will continue to provide support for Bitcoin until the bearish logic emerges.
The likelihood of a September rate cut is increasing. Market expectations are for a 25-basis-point cut in September and another one before the year's end. Combined with CPI data, expectations of rate cut hype, the US election time node hype, and other important data points, patiently await the bull run, which is just around the corner!
Conclusion
We are bullish on Bitcoin's long-term trajectory. In the next decade, Bitcoin will not vanish; it will become more robust, reaching levels of $200,000 to $1 million. Bitcoin will deliver a positive performance in the medium to short term, specifically in Q4 2024 and Q1 2025, driven by the release of liquidity. In the short term, I anticipate a period of consolidation for Bitcoin. While I cannot predict whether it will retrace to its previous low of $49,000, as I am not a fortune-teller, we will respond based on market conditions. Establish your own framework and strategy, buy on dips, buy on larger dips, and hold your positions. Eventually, you will witness the rewards of fate.
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