Countdown to the Federal Reserve's interest rate cut, has the crypto market reached the "golden pit"?

Original Author: TRACER

Compiled by: Ethan, Odaily Planet Daily

Editor's Note: As August begins, the crypto market faces severe volatility again: Bitcoin weakens in the short term, altcoins generally retreat by 20%-30%, with daily liquidations exceeding $1.5 billion. The main driver behind this is pointed towards Trump. From new tariff policies and 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 crypto assets" have intensified market panic, triggering a new round of chain reactions. In this article, the author dissects macro data and capital flows, proposing a judgment different from the mainstream: the short-term pullback may be an opportunity for long-term positioning, and the real "second wave bull market" may already be brewing.

Note: The views in this article are clearly stated and do not constitute investment advice. Odaily Planet Daily reminds readers to rationally reference the analysis content and make prudent decisions based on their own circumstances.

Original Content

Market optimism fades, adjustments quietly arrive, Bitcoin falls 9% from its historical high, and altcoins generally retreat by 20%-30%.

At the beginning of August, the market faced intense selling pressure, with daily liquidation exceeding $1.5 billion. The core question is: Is the incentive for this round of decline severe? How should we respond?

The core trigger for this pullback lies in the latest moves by U.S. President Trump:

• New tariff policy proposals;
• Escalating geopolitical uncertainties;
• Conflicting macroeconomic data.

First, let's focus on that exhausting "new tariff proposal." Over 66 countries have been listed as potential targets for increased tariffs—it's the same old routine. Each time feels like a "replay of an old script," even giving the impression of "market manipulation."

However, the U.S. government clearly would not risk an economic recession just for these tariffs.

Market pullbacks triggered by such actions are not new to us. 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 afterward?

Therefore, there is no need to worry excessively; this is already a well-worn topic.

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

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

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

The market's previous bets on a "Federal Reserve policy shift" (interest rate cuts) have fallen flat.

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

Ultimately, multiple factors have formed a powerful "combination punch":

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

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

So, what is my judgment on the market outlook?

My current view is based on the recognition that macro pressures continue to accumulate. No major economy is currently able to generate sufficient credit growth to support sustained GDP expansion.

I have set key support levels at: Bitcoin $110,000, Ethereum $3,200.

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 declined;
• The job market is under pressure;
• Powell seems intent on delaying the interest rate cut decision.

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

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

Referencing the correlation chart between M2 money supply and Bitcoin price, the conclusion is clear: the market trend follows liquidity, and the overall global liquidity environment remains accommodative.

Therefore, the current fluctuations are essentially a global market game layered with FUD.

Looking ahead to autumn, with the onset of the interest rate cut cycle, I expect that major funds will flow back in large scale, thereby initiating a true "altcoin season."

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

This is precisely my current positioning direction.

During this adjustment, I am focusing on accumulating three types of assets: BTC, SOL, and ETH.

I am particularly optimistic about ETH's technical potential and fundamentals, and I have also noticed the increasing interest from institutions. On August 3, a wallet related to Shraplink added $36 million worth of ETH, which is a case in point.

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 is unlikely to last long. Now is the time to gradually build positions and reserve chips, waiting for the market from October to December.

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