Danger signal warning: The narrowing of the US-Japan interest rate differential may bring pressure on US stocks, and the $$ altcoin season will be postponed
⏳ First look at the conclusion:
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The US stock market is under pressure in the short term, and capital outflows may lead to a weak market, but the expectation of medium- and long-term interest rate cuts may boost the future upward trend of the US stock market.
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The BTC market pays attention to the changes in US stocks and interest rate differentials. The short-term downward shock, but if the expectation of interest rate cuts increases, it will bring medium- and long-term liquidity support, which is good for BTC.
Against the background of the Bank of Japan gradually tightening its monetary policy, the US dollar has entered a cycle of interest rate cuts. The US-Japan interest rate differential has begun to narrow gradually, and funds have gradually flowed back to the Japanese yen, which may become a dangerous signal of tightening liquidity in the US stock market and the cryptocurrency market. The much-anticipated altcoin season will also be postponed.
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What does the narrowing of interest rate differentials mean for US stocks?
When the US-Japan interest rate differential narrows, some borrowed funds flow out of the United States and flow back to Japan, and investors begin to seek lower-risk long-term debt markets. This will lead to short-term capital outflows from the U.S. stock market, especially high-risk assets (such as technology stocks and growth stocks) may be under certain pressure.
The outflow of funds has led to the weakening of the U.S. stock market, which can, to a certain extent, promote the expectation of the Fed's interest rate cut, especially in the context of Trump's policy of attaching importance to the U.S. stock market. If the Fed's monetary policy is more relaxed, the market will have confidence and drive the U.S. stock market up in the medium and long term
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. What does the narrowing interest rate spread mean for the BTC market
The U.S. dollar is weak, and BTC is strong: the price of BTC itself is more sensitive to changes in global liquidity, especially the strength of the U.S. dollar. When the U.S.-Japan interest rate spread narrows, if the yen flows back and the U.S. dollar weakens, it will provide a certain degree of price support for BTC
The U.S. stock market is strong, and BTC is strong: BTC is regarded as a risky asset, and its price volatility is relatively large. If the U.S. stock market performs poorly under the condition of capital outflow, it will force the interest rate cut process, so there may be a downward trend in the short term. If the interest rate cut comes as expected and the market liquidity increases, it will be good for BTC in the medium and long term.
