This week, the cryptocurrency market is trading within a narrow range.

BTC briefly dropped to a support level of $63,000 that day, then rebounded slightly, with a trading price of $63,105 at the time of publication, a nearly 2% drop in 24 hours. Daily range: 55,700-65,000 the full range, currently BTC is at the upper range of the daily range, which is 60,400-65,000.

The daily moving averages are currently breaking away from slight divergence, and the Bollinger Bands' upper, middle, and lower lines are all showing an upward bullish trend, with the price constantly oscillating in the range while attempting to break through the daily Bollinger Bands.

Yesterday's post already warned of the short-term need for retracement, which is currently in line with my expectations for the market. If the bullish trend continues and the price averages keep moving up, BTC's price will maintain an oscillating upward trend.

The current market's game is still whether or not to cut interest rates. This week, the evaluation of the US economy is crucial, with GDP and PCE data having the biggest impact on the sentiment of trading. Nvidia's decision also determines whether there will be a breakout in the technology sector in this sensitive phase. For cryptocurrency traders, GDP and PCE data are our key focus.

Will the US dollar rise as soon as interest rates are cut?

Detailed historical analysis comparing the historical trends of US stocks after the opening of interest rate cuts in the last 20 years, clarifying the logic behind them.

The last round of Fed rate cuts occurred in July 2019.

This was a rapid rate cut caused by the COVID-19 pandemic. Before the Fed rate cut in July 2019, the US stock market had been rising amidst doubts about the trade war and global economic slowdown. By February 2020, due to the spread of the pandemic, the US stock market and the crypto market plummeted nearly 90 degrees vertically, experiencing multiple circuit breakers.

The time points of the last rate cut cycle and the subsequent trend of the US stock market are key to the risk of a major drop in the crypto market. The second key point is: the current trend does not appear to be heading towards a recession yet. Unemployment rate, non-farm indicators are still within controllable range, with no substantial evidence of a recession. Based on statements from Powell, the Fed is also guiding the market to believe so. The third key point is the US presidential election and Trump's term.

In summary: the expectations of further monetary easing in the fourth quarter continue to strengthen, the recession has not arrived yet, no need to worry about a major drop. Also, with Trump's narrative, in the medium to long term, as the expectation of Fed rate cuts heats up and the possibility of a weaker US dollar increases, Bitcoin's attractiveness as a safe haven and store of value still exists.

Key decision before the bull market: Hold or sell?

If we look at the bull and bear phases, we are currently in the middle of the fourth crypto bull market.

A cycle of 4 years, 3 years of bear market, 1 year of bull market. The first 8 months of the bull market cycle are typically characterized by slow consolidation and slight declines. The next 2 months see a strong surge, followed by 2 months of forming a peak. Strictly speaking, the bull market started in December 2023. Therefore, we are currently experiencing an interruption in the bull market. There is still about 6 more months left in the bull market cycle. The real explosive phase has not arrived yet.

Before the arrival of the major bull market, institutions may create enough market volatility to force retail investors to sell, aiming to gain more chips. The basic logic of the market is: when there is a lack of significant volatility, retail investors do not actively chase gains or sell off.

Therefore, the market may experience extreme pressure before the Federal Reserve confirms the interest rate cut on September 19. At this time, it is especially important to hold onto your chips firmly. After a long bear market, do not easily give up on the eve of a bull market.