The countdown to the Fed's interest rate cut has begun, has the crypto market reached the "golden pit"?

Original author: TRACER

Compilation | Odaily Planet Daily

Translator | Ethan

Editor’s Note: As August begins, the cryptocurrency market experiences severe fluctuations again: Bitcoin weakens in the short term, and altcoins generally correct by 20%-30%, with a daily liquidation amount exceeding 1.5 billion USD. The main driver behind this has been pointed to Trump. From new tariff policies, escalating geopolitical tensions, to macro data reversals and the Federal Reserve's inaction, the market is once again shrouded in FUD sentiment. Meanwhile, rumors of "Trump secretly selling off crypto assets" have intensified market panic, triggering a new round of chain reactions. In this article, the author analyzes macro data and capital flows, proposing a different judgment from the mainstream: the short-term correction may present an opportunity for long-term positioning, and the real "second wave bull market" may already be brewing.

Note that the views expressed in this article have a clear stance and are not investment advice. Odaily Planet Daily reminds readers to rationally refer to the analysis content and make prudent decisions based on their own situations.

Original content

Market optimism fades, adjustment quietly arrives, Bitcoin falls 9% from its historical high, and altcoins generally adjust by 20%-30%.

In early August, the market was suddenly hit by intense selling pressure, with a daily liquidation scale exceeding 1.5 billion USD. The core issue is: Is the trigger for this round of decline severe? How should we respond?

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The core trigger point of this pullback is the latest moves by U.S. President Trump:

• Proposed new tariff policy;
• Geopolitical uncertainties escalate;
• Macroeconomic data is full of contradictions.

First, focus on that exhausting "new tariff proposal." Over 66 countries are listed as potential targets for increased tariffs - the same old routine. Each time it feels like "the old script is being replayed," even giving a sense of "market manipulation."

However, the U.S. government will obviously not take the risk of an economic recession just for these tariffs.

Market corrections triggered by such operations are not uncommon. Retail investors often view such news as significant bearish signals and overreact.

Think back, how many times have similar tariff threats been announced? And how many times has the market reached new highs afterwards?

Therefore, there is no need to worry too much about it; this is a common saying.

In addition to tariffs, the recent surge in geopolitical risks has also heightened unease. The trigger is: the United States announced the deployment of two nuclear submarines near Russia. Is this concerning? Indeed it is.

But let's think calmly: does anyone really believe that a nuclear war will break out in 2025? This is more likely a "pressure tactic" aimed at advancing the negotiation process.

However, what truly troubles American economic decision-makers (such as the Federal Reserve) is the chaotic macro data of the labor market.

The market's previous bet on the "Federal Reserve's policy shift" (interest rate cut) has failed.

More critically, the non-farm payroll (NFP) data for May and June was revised down nearly tenfold, which severely undermined the market's confidence in the reliability of overall macro data.

Ultimately, multiple factors form a powerful "combined punch":

• Interest rates remain high;
• Signs of economic cooling are increasingly apparent.

These factors combined have led to a significant shrinkage in institutional investor demand this week. The Bitcoin spot ETF has recorded a net outflow for the first time.

So, how do I judge the future market?

My current viewpoint is based on the recognition of the continuous accumulation of macro pressures. Currently, no major economy is able to generate sufficient credit growth to support sustained GDP expansion.

The key support levels I set are: Bitcoin 110,000 USD, Ethereum 3,200 USD.

I expect that by September, the Federal Reserve will have no choice but to start cutting interest rates to re-stimulate the market.

• Inflation data has significantly retreated;
• The job market is under pressure;
• Powell seems to intend to delay the interest rate cut decision.

As the time approaches, the market is expected to open an upward trend again.

Historical patterns show that after every similar FUD (Fear, Uncertainty, Doubt), the market tends to experience a strong rebound.

Referring to the correlation chart between M2 money supply and Bitcoin prices, the conclusion is clear: market trends follow liquidity, and the overall global liquidity environment remains loose.

Therefore, the current fluctuations are essentially still a global market game compounded by FUD.

Looking forward to the autumn, with the onset of the interest rate cut cycle, I expect substantial capital to flow back, thereby initiating the real "altcoin season".

At that time, it will be a key window period for actively locking in profits.

This is exactly my current layout direction.

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In this adjustment, I focused on the continuous accumulation of three types of assets: BTC, SOL, and ETH.

I am particularly optimistic about the technological potential and fundamentals of ETH, and I have also noticed the growing interest from institutions. On August 3rd, a wallet related to Shraplink re-accumulated $36 million worth of ETH, which serves as an example.

In summary, the strategy is clear: view the current volatility as an opportunity to accumulate positions.

The market landscape is evolving, and such a low buying window may not last long. This is the right moment to build positions step by step and accumulate chips, waiting for the good opportunity in the market from October to December.