The Federal Reserve pouring money is like opening a fire hydrant for a lawn that hasn't seen rain for half a year, but in the crypto space, some areas of this lawn get wet first, while others get trampled into deeper mud. Wells Fargo just announced plans to cut interest rates five times in the next year and a half, with each cut being 25 basis points, equivalent to directly previewing five "liquidity parties". However, Bitcoin has just dropped 6.5% from its peak of $124,000 and is hovering around $113,800 — is this round of easing the match that ignites the market, or is it a sweet trap that causes retail investors to chase highs and get stuck?

Retail investors are all waiting for the "water truck", but they forget to look at the mud pit under their feet.

Today, most retail investors opening their trading software are probably feeling uneasy: on one side, there’s the good news bombardment of a 95% probability of a Federal Reserve interest rate cut in September, while on the other side, the coins in hand have not yet recovered from the correction. The fear and greed index is stuck in the middle, with long positions accounting for 54% of the $274 million in liquidations over 24 hours, indicating that many people are eager to bottom-fish but are being wiped out by volatility. Institutions, however, are split: VanEck is calling for $180,000 by year-end, while CryptoQuant warns that corrections may continue for another 2-4 weeks.

What retail investors should really focus on is not the words "interest rate cut", but the real actions of capital: whale addresses holding over 100,000 BTC are secretly accumulating, while the net inflow to exchanges is also increasing — it's like someone is secretly packing food into their bag at a banquet, while others are quietly moving the wine bottles. Understanding this signal means knowing that now is not the time to rush in with closed eyes.

Why is the "three interest rate cut window" crucial?

Looking back at the historical records, it’s clear that when the Federal Reserve cut interest rates in 2019, Bitcoin rose first and then fell, because the market had already digested the good news in advance; however, in 2024 it surged all the way up due to the presence of a spot ETF and corporate purchases providing a floor. The current situation is even more special: a weak labor market is forcing the Federal Reserve to cut rates, but a core PCE of 3.5% is making the market afraid of a policy shift.

Wells Fargo's prediction of "the next three consecutive interest rate cuts" is the breaking point. The current range of $110,000 to $120,000 is essentially a tug-of-war between "interest rate cut expectations" and "economic recession concerns". Once the three interest rate cuts are implemented, the market will gradually realize: this is not a one-time liquidity injection, but a continuous liquidity wave lasting 18 months. The expectation of a 2.4% GDP growth rate by 2026 is the true support for Bitcoin's bull run.

Short-term operations: Keep a close eye on these three critical lines

  • Support level: $110,000 is the cost line for short-term holders, $108,600 is the golden ratio level of corrections in previous bull markets. If either of these two positions is breached, be alert for a deeper correction;

  • Resistance level: $120,000 is a psychological barrier, $124,000 is a battleground for bulls and bears, don’t chase the rise easily before a breakout with volume;

  • Turning point: $115,000, stabilizing here indicates the end of the correction; otherwise, it may continue to consolidate.

Qing Yao's survival tip is simple: use Federal Reserve interest rate futures data to calibrate positions. Since the probability of a 25 basis point cut in September is 95%, keep 50% of your base position unchanged, and wait to add more once it stabilizes at $115,000. If it drops below $110,000, cut losses decisively. Remember, the Federal Reserve's fire hydrant won't stay open forever, but it won't suddenly shut off either.

While others focus on a single interest rate cut, we are laying out for the interest rate cut cycle

Qing Yao always says that the core of making money in the crypto circle is "think long, act short". While others are concerned about whether it will rise after this interest rate cut, we need to look at the complete cycle of five interest rate cuts in mid-2026. History has shown that Bitcoin's price increase during a loose monetary policy cycle has never been linear; the current fluctuations around $110,000 are more like the buildup before a storm.

Don’t let short-term fluctuations disrupt your rhythm, follow Qing Yao, I will provide precise layout coordinates before each interest rate cut window opens. After all, there will come a day when the fire hydrant's water splashes onto your lawn; the key is to be in the right position in advance! #资金涌入推动SOL上涨