Cryptocurrency Market Dynamics Under Interest Rate Cut Expectations: Analysis of Bitcoin, Ethereum, and Altcoin Trends

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5 hours ago

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After the unexpected performance of non-farm payroll data, expectations for interest rate cuts have surged: the probability of a 25 basis point cut has reached 98%, with even a 14% chance of a one-time aggressive cut of 50 basis points. This expectation hangs over the market like the sword of Damocles, embodying the market's eager anticipation for liquidity easing while concealing numerous uncertainties and risks. Every policy move could trigger significant fluctuations in the cryptocurrency market.

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The issues lurking behind interest rate cuts warrant high vigilance. The exhaustion of positive effects is the foremost concern. Due to the market's strong forward-looking nature, investors have already positioned themselves in advance over the months leading up to the official rate cut, incorporating potential upward space into their decisions. This is akin to a movie being overly spoiled before its release; when it finally debuts, audience anticipation significantly diminishes, and the market may also experience a pullback when the positive news is realized. At the same time, large institutions cashing out have put significant pressure on assets like Bitcoin. A "crypto whale" holding for over five years recently sold approximately $4 billion worth of Bitcoin, shifting to the Ethereum market, having sold a total of 119,000 coins in the past 30 days, setting a record for the scale of sales since July 2022. Large holders cashing out at high levels is like a giant ship suddenly unloading a large amount of cargo, inevitably causing the vessel to sway and triggering market volatility. Currently, the curtain on interest rate cuts has yet to rise, and market speculation has entered a heated stage. The digested positive news and the exit of institutions indicate that the cryptocurrency market's performance post-rate cut is bound to be turbulent. Investors need to find their positioning amid uncertainties, avoid risks, and seize opportunities.

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From the perspective of specific cryptocurrencies, Bitcoin's performance is particularly outstanding. Its price peaked around 116,600 before facing pressure and retracing, dropping to a low of 115,071 before stabilizing. It is currently in a slight consolidation within the 115,500-116,000 range and is steadily operating within a fluctuating upward channel, with the overall trend framework unchanged. Although there have been multiple attempts to break through previous highs, they have all failed to form effective breakthroughs due to a lack of sustained momentum, temporarily restraining the upward rhythm. However, the defense strength of the key support area below is extremely robust, successfully curbing the depth of the market's pullback. Notably, when testing the lower support, the price has consistently recorded K-line patterns with long lower shadows. This technical signal intuitively reflects that whenever the market falls to key support levels, buying interest actively enters the market, significantly enhancing the bulls' control over the lower region, laying a solid foundation for the continuation of the upward trend.

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Ethereum's trend shows a degree of independence. During the weekend, Ethereum experienced a slight technical pullback but remains firmly above the 4,600 support level. The short-term trend may continue to face pressure, and the effectiveness of the support around 4,600 needs to be closely monitored. On the 1-hour chart, the price rebound is temporarily constrained by the EMA30 moving average (around 4,680), with both highs and lows continuously rising, indicating that the bulls still dominate. Recently, K-lines have alternated between small bearish and bullish candles, suggesting that there may be some adjustment demand in the short term. However, from a broader trend perspective, the overall pullback has been relatively small, and the upward trend continues to strengthen amid fluctuations. If subsequent pullbacks during the bottoming process do not effectively break below the key support level, the market is likely to initiate another upward rally.

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Altcoins are consolidating in sync with mainstream cryptocurrencies, and the altcoin index remains neutral, with market sentiment still in a mild recovery phase. Investors need to closely monitor Bitcoin's market share and fiat buying signals to determine the activation signals for altcoins. It is worth noting that Ethereum's affiliated tokens are significantly influenced by Ethereum's performance, often showing a strong correlation with it.

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In the current context of intertwining interest rate cut expectations and market speculation, Bitcoin, Ethereum, and altcoins each exhibit different operational dynamics. Investors need to comprehensively consider macro policy expectations and the technical signals of each cryptocurrency, exercising caution in their operations to respond to various potential market changes.

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If you are feeling lost—don’t understand the technology, don’t know how to read the market, unsure when to enter, don’t know how to set stop losses, don’t understand take profits, randomly increasing positions, getting stuck at the bottom, unable to hold onto profits, missing out on opportunities… these are common issues for retail investors. But don’t worry, I can help you establish the correct trading mindset. A single profitable trade speaks louder than a thousand words; finding the right direction is better than repeatedly facing defeats. Instead of frequent operations, it’s better to strike precisely, making each trade more valuable. If you need real-time guidance, you can scan the QR code at the bottom of the article to follow my public account. Market conditions change rapidly, and due to the timeliness of reviews, subsequent trends will be based on real-time layouts. I look forward to progressing steadily with you in the market.

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