Many people were stunned when looking at the market in the morning. As soon as the news of the Federal Reserve's interest rate cut came out, Bitcoin not only didn't rise but also plummeted.
In fact, this seems like a positive but is actually a pitfall. On one hand, the good news was anticipated too early; this time the rate was cut by 25 basis points to 3.50% - 3.75%. Well-informed funds had already positioned themselves half a month ago, and after the announcement, they took profits and sold off, causing the market to crash.
On the other hand, the expectation of future rate cuts has fallen flat. It is expected that there will be only one rate cut in 2026, and Powell mentioned that there might be only one cut next year. Tight money has shattered the fantasies of a bull market, leading to heavy selling by a large number of buyers.
Moreover, there are differing opinions within the Federal Reserve. Three members opposed this rate cut, with some believing it shouldn’t have happened. Everyone is worried that there won’t be another rate cut in the near future.
In summary, the anticipated continuous easing of monetary policy hasn’t arrived. With fewer rate cuts expected next year and differing internal opinions, expectations are gone, leading to a significant drop in Bitcoin.
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