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“Why is it that everyone is certain about a rate cut, yet prices seem unable to rise”?

If you are not someone who just entered the market this week, you should actually be aware that the trading related to the rate cut has already been largely completed. After Powell's speech continued to raise expectations for a rate cut, the trading of rate cut expectations has even reached 90%.

Looking back at the timeline, at the end of July, the market still had doubts about a rate cut in September. However, at the beginning of August, after the short-term bearish factors were cleared, expectations for a rate cut rose, and the probability of the CME swap rate returned to over 50%.

Even in the second and third weeks of August, the probability of a rate cut in September remained above 90%, especially at the end of the second week, due to Bessen's speech, which even guided the market towards a 50 basis points rate cut in September.

Therefore, it is clear that the market has already fully priced in the expectations for a rate cut in September. So at this point, even if Powell pushes the probability of a rate cut in September again, it will only bring a short-term emotional rebound, but it cannot elevate prices to higher levels.

Of course, is there still good news to drive a rate cut?

Definitely, if the conditions can raise the probability of a 25 basis points rate cut to 50 basis points, then the effect on price appreciation will still be very significant!

Returning to the charts, we can also see that at the end of the second week, #Bitcoin broke its historical high, which is the effect of the probability of a rate cut in September, or even a 50 basis points rate cut!

When a piece of good news has already overdrawn bullish momentum in advance, it is evident that subsequent similar good news will find it difficult to bring about better breakthrough momentum. Therefore, to understand why the rate cut leads to a price rebound, you need to know what has been traded during this period!