The Federal Reserve will hold a monetary policy meeting on the 17th and 18th Eastern Time, and will announce the latest interest rate policy at around 2 a.m. on Thursday (19th) Taiwan time. All analysts expect a rate cut, but there are different opinions on whether to cut interest rates by 1 or 2. FedWatch data shows that current market expectations are that the probability of a 1-digit rate cut is 35%, and the probability of a 2-digit rate cut is 65%.
U.S. stocks are nearly flat, but Bitcoin rebounds sharply
As the market awaits the Federal Reserve's decision to cut interest rates, U.S. stock investors are afraid to act rashly. Although the U.S. Department of Commerce data released on Tuesday showed that retail sales increased by 0.1% in August, which was better than market expectations and eased investors' concerns that the economy may slow down sharply. concerns, but the four major U.S. stock indexes closed roughly unchanged on Tuesday.
The performance of the four major U.S. stock indexes is as follows:
- The Dow Jones Industrial Average fell 15.90 points, or 0.04%, to close at 41,606.18 points.
- The S&P 500 index rose 1.49 points, or 0.03%, to close at 5634.58 points.
- The Nasdaq index rose 35.93 points, or 0.2%, to close at 17628.06 points.
- The Philadelphia Semiconductor Index rose 1.66 points or 0.03% to close at 4912.10 points.
However, compared to the quiet performance of the US stock market, Bitcoin has begun to rise significantly. After Bitcoin hit a low of $57,431 at midnight yesterday (17th), it rebounded sharply and rose rapidly after 10 o'clock last night, 23:15 It once hit $61,343, the highest price since September. As of this writing, it continues to fluctuate at $60,000.
In the past, the market has said that Bitcoin is a leading indicator of the overall economy, and usually interest rate cuts are a major benefit to risky assets such as Bitcoin, which will bring huge liquidity to the market. Therefore, Bitcoin’s performance before interest rates are cut is Strength may be a bullish signal, but is it really so?
The derivatives market is not optimistic but continues to rise
Cointelegraph reported that derivatives data showed a lack of enthusiasm among Bitcoin investors. Although Bitcoin once exceeded $61,000, traders are still doubtful whether the rising momentum can be sustained.
To assess whether Bitcoin traders have turned bullish, check the BTC futures premium. After approaching the neutral 5% level on the 16th, the Bitcoin futures premium has remained at 6%, although Bitcoin has surged from below $58,000 to $61,000, but investor sentiment remains cautious, indicating a lack of confidence among traders, so it remains to be seen whether $61,000 can turn into a support level.
In addition, the 25% skewness indicator of Bitcoin options is currently only approaching 2%, indicating that the pricing of put options and call options is close, the market sentiment is neutral, and there is no obvious bullish sentiment, and this neutral sentiment has continued to exist in the past week.
In addition, China’s demand for stablecoins can usually be used as a reference indicator for traders to enter or exit the cryptocurrency market. However, China’s current demand for stablecoins is still weak. Since the 9th, in the P2P market where USDT is exchanged for RMB, USDT has been Trading at a discount of 0.3% indicates that investors have been cashing out at a discount and are not optimistic about the market outlook.
Fed decisions affect trends
After the Federal Reserve announced its interest rate cut decision later, a 1 or 2-digit rate cut was still within market expectations. However, a 3-digit rate cut may indicate that the risk of the economy falling into recession is greater than imagined, which may lead to more violent fluctuations in Bitcoin. Investors are advised to pay attention to the risks.
In addition to interest rate decisions, the market will also pay close attention to two key points that may affect currency price trends :
- The " dot plot " in the Fed's quarterly forecast update will show Fed members' expectations for interest rate trends in the next few years. If it is too aggressive, it may deepen market recession expectations.
- Federal Reserve Chairman Jerome Powell's press conference at 2:30 will express his views on future policies. If he is too hawkish, it may affect market sentiment.
