In the past two days, the overall crypto market has been in a sideways trend, with Bitcoin fluctuating at $59,000 and Ethereum fluctuating at $2,500.
Altcoin as a whole are also in a volatile trend, and market sentiment is relatively depressed. It can be clearly seen that almost no one is chatting in the major communities.
The current trend of the crypto market basically follows the performance of U.S. stocks, especially technology stocks.
The crypto market now lacks its own independent narrative. It has no independent reasons for rising or falling, but instead follows the performance of the U.S. stock market and the U.S. economy.
This may be a price to pay after the passage of the Bitcoin spot ETF, as the ETF makes the Bitcoin market more closely connected with the traditional financial market.
The news worth noting is:
1. Can the “falling curse” of September be broken?
In the financial market, there is a saying called the "September curse", which means that the market tends to fall in September. According to historical data, Bitcoin has fallen eight times in September in the past 11 years, which means the probability of a fall is as high as 72%.
Similarly, U.S. stocks have fallen eight times in September over the past 10 years, with a decline probability of up to 80%.
Therefore, many people believe that September is a month when the market is prone to decline.
Although the probability of a market decline in September is relatively high, it does not mean that it will definitely fall. It still depends on market sentiment and the Fed's interest rate cut this time.
It is worth noting that it is mainly short-term holders who are selling Bitcoin now, while long-term holders are accumulating more Bitcoin in preparation for the future bull market.
2. Will the Fed’s September rate cut lead to a market decline?
This is not certain, it depends on whether the US economy is in recession.
Interest rate cuts usually occur when the economy starts to deteriorate.
Why? Because when the economy is bad, the government or central bank will stimulate economic growth by lowering interest rates.
Lower interest rates boost the economy by making it cheaper to borrow money, encouraging businesses and individuals to spend more.
However, interest rate cuts cannot really solve the problem of economic recession. It is more like "fixing the fold after the sheep have been lost", that is, interest rate cuts are remedial measures taken after the economy has started to deteriorate, rather than preventive measures.
Therefore, historical data shows that markets tend to fall during periods of rate cuts, as rate cuts are usually accompanied by economic recessions.
It is important to note that interest rate cuts are not a one-time action, but an ongoing process that may last for a year or even longer.
During this process, market reactions may vary.
For example, in the early stages of a rate cut, if the economy does not immediately show signs of recession, the market may not be too pessimistic and may even see some gains.
But there is also a phenomenon called "Sell The News", which means that the market has already reacted in advance when it expects a rate cut.
When a rate cut actually happens, investors may choose to sell assets because they feel the good news has already materialized.
3. Will the US presidential election boost the crypto market?
According to historical data, during the US presidential election, the market usually performs better in the two months before and after the election. There is even a saying that if the market falls sharply before the election, it is likely to rise higher after the election. Of course, this is just a summary of historical data and may not always apply.
There have been cases where elections coincided with recessions, but even so, the market usually performs well during elections.
If there is no recession in the U.S. in 2024, the year-end election, Bitcoin halving, interest rate cuts, and FASB policies could combine to drive the market higher.
In general, the crypto market may continue to fluctuate in the short term, and the downward trend in September may affect market trends.
Although the probability of a market decline in September is higher, it does not mean that it will definitely fall.
Next, we can focus on the Federal Reserve's interest rate meeting on September 18 and the performance of the US stock market. They will affect market sentiment and price trends in the short term. For more information, please join the QQ group: 580869654
