The world is bustling, all for profit; the world is bustling, all for profit to go! Hello everyone, I am your friend Lao Cui talking about coins, focusing on digital currency market analysis, striving to convey the most valuable market information to the vast number of coin friends. Welcome everyone's attention and likes, and reject any market smokescreens.

A wave of significant decline has finally made us start to think calmly. Fortunately, yesterday's layout for long positions did not let everyone enter the market. Lao Cui entered long positions around 103600, and it was good to exit quickly when the market reached 104600. Overall, yesterday's layout relied on one word: fast. Before the wave of interest rate cuts arrives, the market was pushed forward with longs, but a sudden wave of decline in the early morning exceeded many people's expectations. Many friends are asking Lao Cui, why did it drop even with interest rate cuts? The decline yesterday was not just the trend in the crypto circle; the entire financial market was almost in chaos, with only the dollar index remaining strong. Why did this situation occur? It's very simple to understand: there were too many chips laid out before the interest rate cuts. From the beginning of '94, it was pulled to 108366 without any pullback in between. Lao Cui is not a backseat driver; I have already reminded everyone that there must be a pullback before the interest rate cuts, but this time the pullback came too late on the timeline. Including yesterday's speech by Powell, it was like adding insult to injury for the crypto circle. The interest rate cuts are coming, but it also brings unfortunate news.

First, the 25 basis points have been given to everyone, but from the dot plot, it seems that there may only be two interest rate cuts next year. Don't think that the American dot plot is just for show; its accuracy is about 80%. Unless there is a strategic adjustment in the American economy next year, these two interest rate cuts are already a done deal. This is a blow to all financial markets. From this year's predicted dot plot, there were originally four interest rate cuts planned for 2025, and it seems the Americans did not expect the strength of the US stock market to be so strong, so canceling two cuts is also within reason. What does the cancellation of two cuts mean? Lao Cui will review it for everyone: the target range for the federal funds rate has been lowered by 25 basis points to between 4.25% and 4.50%, which aligns with the general market expectations. From March 2022 to July last year, a total of 525 basis points were accumulated in interest rate hikes. After this interest rate cut, it will be a total of 100 basis points, and for next year's forecast, by the end of 2025, the interest rate will remain between 3.75% and 4%, which means at most 2-3 interest rate cuts of 25 basis points. Even with maximum calculations, that is three interest rate cuts, which only amounts to a reduction of 175 basis points, and overall, it is still in a state of 350 basis points of interest rate hikes. You can understand it this way: Bitcoin has only retraced to the 90,000 mark from the 39,000-100,000 range. Do you think this kind of pullback is a healthy state?

The above viewpoint means that next year, the Americans will operate under a high-interest rate state, and there will be no expected capital outflow. Whether it is Bitcoin or other financial markets, the estimated capital volume is based on the assumption of four interest rate cuts next year, and suddenly cutting the interest rate expectations in half means everyone needs to reassess the chips in hand. Additionally, as Powell mentioned at the end, this is aimed at the crypto circle, stating that the Federal Reserve has no plans to include Bitcoin in its investments, which is a fatal blow. I have to say Powell is indeed quite impressive; his thoughts almost exceed everyone's expectations. At the same time, his credibility is not high. Based on the current strategy, Lao Cui treats his statements more as a smokescreen, after all, he has not had the upper hand in his dealings with Trump. This is a systemic issue that we won't elaborate on too much; he indeed has the strength to confront Trump. The strategic reserves of the Americans are not part of Lao Cui's plan; this path of strategic reserves will only be considered when the market cap of the crypto circle reaches around 10 trillion, which is currently insignificant. The road is still long, and if you walk, you will arrive.

Speaking of recent capital movements, Lao Cui reminds everyone that the outflow plan from within the country has already begun to be implemented. According to what Lao Cui has learned, about one-third of the assets were offloaded yesterday, with Ethereum having the highest volume of outflow, so I am giving everyone a perfect point to take over. It is expected that the entire position will be cleared before Trump takes office. Looking back at the entire market, it indeed peaked at a high point. The phenomenon of market dumping will still occur in the future, so everyone should protect their chips well. Lao Cui knows that the timing of this news is too late, and I couldn't notify everyone in time; I managed to escape quickly myself, so please don't blame me! This wave of interest rate cuts leading to a decline has instead brought the market to a balanced state, which is the rise of the dollar index and the decline of the US stock market. This is considered a healthy cycle. The emergence of this situation will also help everyone reduce some losses, as the price of USDT continues to rise. When converted to CNY, the current market cap of the crypto circle has not actually declined; it is a matter of one rising while the other falls. This is particularly evident for small coins, where the decline remains significant, and the rise in USDT prices is not beneficial for small coins. At this stage, the trend of small coins is almost consistent with our previous predictions, all returning to the previous lows before starting the next round of growth. Everyone should not misjudge the entire market; the overall market cap and the previous capital ratio are still in a bull market phase. The current trend is merely a repair of the so-called capital that entered during the interest rate cut. The upcoming trend will still revolve around the bulls, and even if the bears come, they won't last long.

Many people are confused about yesterday's interest rate cut, so I will give a detailed explanation at the end of the article about why Powell criticized the crypto circle. The logic is simple: the interest rate cut is intended to stimulate the US stock market, allowing capital to flow back into the American market, thereby boosting the economy. This is the responsibility of the Federal Reserve, and after multiple interest rate cuts, the crypto circle is indeed the most affected, so it needs to cool down. However, this cooling cannot control market behavior, meaning the final direction is not determined by him. At this stage, the only thing he can do is to attack through public opinion. So why does Trump want the crypto circle to grow? This is a matter of differing starting points. Trump's layout is broader, and the formation of the crypto market will definitely have an impact on the US stock market. This is the different mechanisms mentioned above; the Federal Reserve directly affects the US stock market, while Trump wants to ensure that the government also has an investment market behind it. Even if the Federal Reserve has no plans to invest in the crypto circle, the government behind Trump has strategic investment plans and some states have already begun implementation. Their mechanisms mean that the Federal Reserve and Trump do not belong to the same camp, so it is normal for the two to have different divergences. Everyone should not think that the Americans are a solid block; this is a completely different concept. What Trump wants to do is far more ambitious than the Federal Reserve's layout. In the competition between the two, Trump will definitely have the upper hand. At this stage, Trump's camp holds all powers of enforcement, legislation, and constitutional amendment, which gives them greater strength! Do not be misled by the Federal Reserve; the real good news for the crypto circle has not yet arrived, so be more attentive. Regarding the future layout of Bitcoin, Lao Cui's thinking aligns with CZ's: Bitcoin below 100,000 can be held at any time. The current layout is only targeting the measures after Trump takes office. As for the short-term trend, there is no need to elaborate today; it will definitely revolve around repair. The short-term impact has basically been eliminated, and the capital volume flowing in from the interest rate cuts needs time to fill, which will create a time lag. Everyone should not worry too much; the bull market is still on, and trading should still revolve around long positions, which is not a big problem! That's all for now; I am quite busy today. If anyone has questions, leave a message, and Lao Cui will reply when he sees it!

Original content from WeChat public account: Lao Cui Talks About Coins. For assistance, please contact directly.

Lao Cui's Message: Investing is like playing chess; a master can see five, seven, or even more than ten moves ahead, while a novice can only see two or three moves. The master considers the overall situation and the big trend, not focusing on a single piece or territory, aiming for the ultimate victory, while the novice fights for every inch, frequently switching between long and short positions, only competing for short-term gains, resulting in frequent entrapment.

This material is for learning reference only and does not constitute trading advice. Trading based on this is at your own risk!

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