On September 24th, just one week after the Federal Reserve's first interest rate cut of 2025, Chairman Powell spoke publicly again, sending a complex and nuanced signal. He warned that a weakening US labor market and a pressured economic outlook, coupled with inflation remaining above 2%, present a "two-way risk" dilemma for policymakers, stating that "there is no risk-free path." Powell also commented on the high valuations of the stock market, but emphasized that this is "not a period of elevated financial risks." Regarding the October meeting, Powell indicated that there was no predetermined policy path. The market interpreted his remarks as a dovish stance: following the announcement, the probability of an October rate cut rose from 89.8% to 91.9%, with the market essentially pricing in three rate cuts this year. Driven by expectations of easing, US stocks have repeatedly reached new highs, but the crypto market presents a stark contrast. On September 22nd, the crypto market saw a single-day liquidation of $1.7 billion, the largest since December 2024. Below, BlockBeats has compiled traders' perspectives on the upcoming market conditions to provide some guidance for your trading this week. @0xENAS Traders believe all signs point to a weakening crypto market. When I re-entered the market after a two-week hiatus, I coincided with the year's largest liquidation pullback. However, the very "liquidation buy orders" that historically trigger an 80% rebound continued to decline—a dislocation that's a clear red flag. A 20% failure often indicates a lack of marginal buyers in the market, and no one is willing to take up the baton of a rebound. I suspect we'll increasingly deviate from the correlation with "risk assets" like US stocks, and begin to lose several key support levels. My observations are: BTC breaking through the $100,000 support level, ETH falling below $3,400, and SOL falling below $160. We believe the global asset bubble cycle has likely entered its warming phase, and its resurgence appears to be only a matter of time. This bubble cycle is occurring against the backdrop of unemployment and social divisions driven by the impact of AI. Supported by the global fiscally driven economic cycle and political and economic ecosystem, and accelerating as the trend of global bipolarization becomes more pronounced, the two major powers are jointly looking to export inflation to resolve internal conflicts. This trend is expected to enter public discussion in the coming months. Looking ahead, while the digital currency market, which has remained relatively stable for nearly a year, is a potential huge winner, the global cyclical mining and AI-derived investment chains will continue to generate excess returns. Regarding crypto-stocks, the success of ETH will lead to the emergence of a series of copycat platforms. It is expected that the combination of strong large-cap cryptocurrencies and strong stocks will become the most eye-catching segment in the coming months. As competitively advantaged countries begin considering setting up investment accounts for newborns, further relaxing investment restrictions on pension funds, and elevating capital markets, historically a channel for financing, to new heights, the possibility of a financial asset bubble has become highly likely. We're also pleased to see the US dollar market begin to embrace the inherent volatility of digital currencies and provide ample liquidity pricing for them. This would have been unimaginable two years ago, just as MSTR's success was a financial miracle we couldn't have predicted two years ago. To put it simply, we are clearly bullish on the digital currency market over the next six months, and on the global mining and cyclical markets and AI-derived industry chain over the next one to two years. At this moment, economic data is no longer so important. As many in the crypto community jokingly say, "economic data is always good news." As history rumbles forward, following the trend and embracing bubbles may have become the most important task for our generation. @Murphychen888 According to the "three-line convergence" trend, after October 30th of this year, MVRV will enter a long-term downward trend of volatility, completely aligning with the time pattern of Bitcoin's past four-year cycle. However, according to this macroeconomic forecast data, the overall signal conveyed is "soft landing + falling inflation + gradually loosening monetary policy." While the future is unknown, if this is true, then the four-year cycle theory may be truly broken, and Bitcoin may enter a "perpetual bull market." The logic behind the outperformance of US stocks over cryptocurrencies during large-scale fluctuations lies in the fact that the overall market remains subtly concerned about the future trend of inflation. The strength of US stocks lies in their strong fundamentals. AI is accelerating, enabling them to withstand concerns about inflation and continue their rapid growth. The problem with cryptocurrencies is that they are driven by capital and expectations, and macroeconomic concerns can affect the flow of external funds. The current cryptocurrency market is driven by traditional funds entering the market from ETFs and listed companies as buyers, while whales and trend investors acting as profit takers act as sellers. Market price fluctuations and volatility are largely driven by the interplay between these two forces. In the short term, economic strength, inflation trends, and interest rate expectations all influence the inflow of buyer funds. Positive expectations accelerate inflows, while negative expectations halt or even reverse inflows. The Fed has resumed rate cuts, but inflation is still slowly rising. The market is naturally concerned that future rate cuts will be interrupted by inflation. This will impact buyer inflows, as evidenced by changes in ETF net inflows. Meanwhile, the AI penetration rate in the core US stock market is about to reach 10%. Once this rate is exceeded, it will enter a golden period of rapid penetration growth. It continues to be said that AI is accelerating. From this perspective, the strengths and weaknesses are naturally reflected.
Subsequent market trends will require reference to macroeconomic data:
1) Best-case scenario: The pace and magnitude of inflation rise are lower than expected, which is positive for both cryptocurrencies and US stocks.
2) Medium-case scenario: The pace of inflation is in line with expectations, which is more positive for US stocks due to their stronger fundamentals. Cryptocurrencies will perform relatively well, but there is a high likelihood of large-scale fluctuations.
3) Worst-case scenario: Inflation significantly exceeds expectations in the future, causing a correction in both the US stock and cryptocurrency markets, with the US stock market potentially experiencing a small or medium-sized correction.
@WeissCrypto
The liquidity impact of the Fed's interest rate cut will not be injected into the crypto market until mid-December. Its model suggests that sideways fluctuations could last for 30 to 60 days, with a clear bottom likely forming on October 17th. Notably, Weiss Crypto recently predicted a peak around September 20th. Joao Wedson, founder of the blockchain analytics platform Alphractal, stated that Bitcoin is showing clear signs of cyclical exhaustion. He noted that the SOPR trend signal, which tracks on-chain realized profitability, suggests that investors are buying at all-time highs while profit margins are already shrinking. The realized price for short-term Bitcoin holders is currently $111,400, a level that institutional investors should have reached much earlier. He also noted that Bitcoin's Sharpe ratio, a measure of risk-reward, has weakened compared to 2024. He suggested that "those who bought BTC at the end of 2022 will be satisfied with the +600% return, but those who accumulated in 2025 should reconsider their strategies," and market makers tend to sell BTC and buy altcoins, which will perform better in the future.
Alex
Hui Xin
Joy
Kikyo
Brian