At 2 am this morning, the Federal Reserve officially announced a 50 basis point rate cut! After the rate cut, the target range for the federal funds rate is 4.75% to 5.00%, slightly higher than expected.
This shocking news instantly went viral worldwide!
It has been exactly 4 and a half years since the last rate cut in March 2020. Today, the Federal Reserve's rate cut has initiated a new round of rate cuts. The world has suffered from high U.S. interest rates for too long! Since the violent 11 consecutive rate hikes starting from March 2022, which reached 5% to 5.5% in July 2023, the U.S. has maintained high interest rates, draining funds from around the world, including ours, leading to global economic weakness and stagnation. The U.S. debt has also rapidly accumulated to over $35 trillion due to high interest rates, and it has been holding on until now. Without further rate cuts, it may not be far from self-destruction!
In response to the rate cut news, the three major U.S. stock indices saw increased intraday gains, and the price of gold reached a new high of $2600. However, all U.S. stock indices closed lower, and the price of gold quickly fell back to around $2500 after a short-term surge, while the offshore RMB exchange rate reached a recent high. The Nasdaq index, as mentioned in a previous article, is expected to experience a certain degree of pullback after hitting a new high due to excessive profit-taking, making it difficult to reach a historical high again in the short term.
Regarding the cryptocurrency market, this account has been inactive for a while, but within the community, there has always been a reminder: "Hold coins for the rise!" Why such a conclusion? Everything is based on the structure of the K-line.
Just took a look at the market, BTC has surged to 62,000 points, and ETH has also reached nearly 2400 points. Let's take a look at the weekly chart for Bitcoin:
From the weekly chart, it can be seen that the bottom pattern has been established again, combined with the MACD retracing to the zero axis, the red bars have been continuously shrinking, and the daily MACD is about to cross above the zero axis. All indicators point to a high probability of an upward move on the weekly chart. As for the height of this move, it first depends on whether it can smoothly break through 65,000, and most importantly, the strength of the upward move after the breakthrough.
The Federal Reserve's rate cut is undoubtedly a long-term positive for the cryptocurrency market, as some funds will flow into the cryptocurrency market after the rate cut, increasing liquidity. The rate cut represents a new round of quantitative easing in the future, which means gradually opening the faucet, and the water will gradually flow larger until it overflows. The cryptocurrency market is also one of the pools of funds that will receive the large influx. This is also one of the decisive factors determining the height of the upcoming bull market cycle in the cryptocurrency market.
The above analysis is for reference only and does not constitute any investment advice!
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