In recent days, the crypto market surged, with Bitcoin breaking through $0.066 million USD again, and altcoins rebounding as well. The analyst from StarEx exchange believes that with the upcoming USA elections, there are more bullish factors in the market, supported by Trump's poll data significantly leading Harris, making the market sentiment enthusiastic, while the macroeconomic environment in the USA remains robust.

In the current crypto market, investors' expectations mainly focus on two aspects: on one hand, they hope for the Fed to relax monetary policies at the macroeconomic level and provide liquidity support; on the other hand, they anticipate substantial ecosystem development in the crypto industry to break the current speculation dominated by meme coins, reducing the phenomenon of VCs frequently unlocking liquidity.

The analyst from StarEx exchange believes that before the USA elections, the Fed will try to maintain financial market stability to prevent turmoil. From the data perspective, the US economy still shows strong performance, and the Fed seems to be signaling a controlled pace of rate cuts to the market.

In September this year, the Fed announced a 50 basis points rate cut, leading to an increased expectation for further rate cuts. It is widely believed that the Fed will continue to accelerate the pace of rate cuts in the future, considering the alleviation of inflation pressures while facing greater economic challenges. However, Fed Chair Powell's speech suddenly cooled investors' optimism, as he explicitly stated that the 50 basis points rate cut in September does not imply a normal rate cut, and the Fed will not quickly implement further rate reductions.

On October 10th, the Fed released the minutes of the September meeting, where members unanimously agreed that the recent rate cut should not be interpreted as a signal of concern about the economic outlook, nor should it be seen as the Fed preparing for rapid rate cuts. The minutes also mentioned that there is still a contractionary stance in monetary policy, the Fed's position, with the US economy still performing strongly. Therefore, even with rate cuts, it is not out of concern for economic recession, but more about managing inflation expectations.

The 'hawkish' policy of the Fed and relatively strong economic data have strengthened the US dollar exchange rate again, leading to a drop in gold prices, depreciation of the Japanese yen, and a return to the upward trend in US bond yields. Especially, long-term US bond yields have returned above the 4% mark, indicating a gradual reduction in market expectations for further rapid rate cuts by the Fed.

The Fed's monetary policy caught the market off guard. Over a year ago, the market had already anticipated the Fed would quickly move towards rate cuts. However, unexpectedly, the Fed 'toughed it out' in a high-interest rate range for over a year, and even after the rate cuts, it still maintained relatively high interest rate levels.

The analyst from StarEx exchange believes that the Fed should not give the market the illusion of needing to cut rates quickly due to increasing economic pressure. They make the market believe that the US economy is very robust, and then they control the rate cuts rhythmically. Maintaining stability in the capital markets becomes an important task before the 2024 USA elections. Excessive rate cuts may lead to capital outflows from the USA and increase stock market volatility, contrary to the economic stability that the Fed is currently seeking.But after the bursting of the internet bubble and the Fed's rate cut in 2001, the ROI dropped by more than 10%.The target is moving in the opposite direction. Therefore, it can be expected that the Federal Reserve will adopt a gradual rate cut approach, exchanging time for market adjustment space, to avoid causing economic shocks in the short term.

For the crypto market, this means that liquidity is unlikely to increase significantly in the short term, but it will not decrease significantly either. In the future, regardless of who wins the election, the only way for the U.S. government to deal with its massive debt burden is still to print money, diluting debt pressure through monetary expansion. At that time, the crypto market may once again have an opportunity for liquidity injection.

Analysts at StarEx Exchange believe that after the election, the current monetary policy and economic conditions will also change. If Trump provides a friendly environment for cryptos and implements large-scale monetary stimulus policies again, bitcoin could easily break through the $0.1 million mark.