First, let's clarify two points:
1️⃣ The bull market has started since January 2023, and now it has been 2 years and 8 months; is there an eternal bull market?
2️⃣ Bitcoin has risen 8 times from its lowest to highest point, which is an astonishing growth.
Let's make a hypothesis: What would happen if a rate cut of 0.25 basis points is confirmed on the 18th of next month?
I admit that some funds will flow into the crypto space, but the question is: how much can come in?
Don't forget, traditional markets like gold, stocks, futures, and foreign exchange will also divert a large portion of funds.
Moreover, the US stock market is currently at a high level, and large funds are more cautious; they always consider risk first, rather than rushing in like retail investors.
Now let's look at the interest rate itself. A 0.25% rate cut does not mean rates return to zero; it’s not an interest-free environment.
The current interest rate range is 4.25%—4.5%, and after the rate cut, it will still be 4%—4.25%, which is still a high interest rate level.
Isn't it nice for large funds to just 'lie down and earn interest'?
It's like a parabola opening downwards; current interest rates are near the peak, and a 0.25% decrease is still at a high level, which does not fundamentally change the attractiveness for large funds.
Let’s imagine an extreme scenario:
Suppose there are 100 billion USD lying in the bank earning interest, waiting to buy Bitcoin immediately after a rate cut.
Please think:
👉 Why didn't they buy when Bitcoin was at a low last year?
👉 Why didn't they buy when it corrected to over 70,000 in April this year?
Clearly, if they had bought 4 months earlier, they could have easily gained a 50% increase (from 80,000 to 120,000), far exceeding the annualized 4.5% interest return.
Do you think these large funds would be willing to buy at 110,000 or 120,000, gladly lifting the retail investors?
Smart money won't do that. They won't enter at low positions, and even less so at high positions.
There's an even more direct fact:
During the pandemic from 2020 to 2021, central banks around the world flooded the market with liquidity, and the Federal Reserve's rates even dropped to 0%, resulting in top-tier liquidity.
What was the result? Bitcoin only rose to a maximum of 69,000.
Now the interest rate is still at 4%; do you think it can push BTC to 150,000? Logically, it doesn't make sense.
In yesterday's article, I have already conducted detailed analysis combining cycles, K-lines, trading volume, and MACD:
👉 Over 120,000, it is highly likely the major top of this bull market.
👉 The current trend is likely forming a weekly head and shoulders top.
👉 The probability of a short-term major drop is low; it’s more likely to use the 'rate cut expectation' to maintain market sentiment and harvest one more wave.
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I have been studying naked K technology for 4 years and share the most insightful market thoughts every day.
