Rate Cut Hangover: Has the Crypto Bull Market Ended? | Trader's Insight

On September 24, just a week after the Fed's first rate cut in 2025, Chairman Powell once again made a public statement, conveying a complex and subtle signal. He warned that the U.S. labor market is showing signs of weakness, the economic outlook is under pressure, and inflation remains above 2%, creating a "two-way risk" that complicates policy decisions, and stating that "there is no risk-free path."

Powell also commented that stock market valuations are quite high, but he also emphasized that the current period is "not a time of increasing financial risk." Regarding the October interest rate meeting, Powell stated that there is no preset policy path. The market interpreted this speech as having a "dovish tilt": after the speech was released, the probability of a rate cut in October increased from 89.8% to 91.9%, and the market has essentially bet that there will be three rate cuts this year.

Driven by loose expectations, the U.S. stock market has repeatedly hit new highs, while the crypto market has presented a completely different picture. On September 22, the cryptocurrency market saw a single-day liquidation amount of up to $1.7 billion, marking the largest liquidation scale since December 2024. Next, BlockBeats has compiled traders' views on the upcoming market situation, providing some directional guidance for this week's trading.

@0xENAS

The trader named Dove believes that various signs indicate that the crypto market is gradually weakening.

When I re-entered the market after a two-week break, I coincided with the largest-scale liquidation pullback of the year, only to see that those "liquidation buy orders" that historically led to an 80% rebound continued to fall this time—this misalignment is a very clear danger signal. The situation of 20% default often means that there are not enough marginal buyers in the market, and no one is willing to pick up the baton for a rebound.

I suspect that we will increasingly detach from the linkage logic of "risk assets" such as U.S. stocks and begin to breach several key support levels. My observation points are: a BTC break below $100,000, ETH falling below $3,400, and SOL dropping below $160.

@MetricsVentures

We believe that the global asset bubble cycle has most likely entered the warm-up phase, and the takeoff seems to be only a matter of time. This bubble cycle occurs against the backdrop of AI-induced unemployment and social fragmentation, supported by the global fiscal-led economic cycle and political-economic ecosystem, and accelerated by the explicit polarization of the world's two poles leading to a shared expectation for inflation to address internal contradictions. It is expected to enter the public discussion spotlight in the coming months.

Looking ahead, apart from the relatively stable cryptocurrency market, which has not seen significant fluctuations for almost a year and is a potential big winner, the global cyclical mining and AI-derived investment chain will continue to generate excess returns. Regarding altcoins, the successful altcoinization of ETH will lead to a series of copycat phenomena, and it is expected that the combination of large-cap coins with strong institutional support and high-quality altcoins will become the most eye-catching segment in the coming months.

As competitive advantage countries begin to consider setting up investment accounts for newborns, further relaxing pension fund investment restrictions, and elevating capital markets historically used as financing channels to new heights, the bubble in financial assets has become a high-probability event.

We are also pleased to see the USD market starting to embrace the native volatility of digital assets and providing ample liquidity and pricing for it, which was unimaginable two years ago, much like MSTR's success, which was a financial magic trick that we could not predict two years ago.

In short, we are unequivocally bullish on the cryptocurrency market in the next 6 months, the global mining and pro-cyclical markets, and the AI-derived industry chain in the next 1-2 years. At this moment, economic data is no longer as critical. As many in the crypto community jokingly say, "economic data is always good news." In the face of the thunderous historical train moving forward, embracing the bubble trend at this moment may have become the most important issue for our generation.

@Murphychen888

Following the trend of "three lines in one," after October 30th of this year, MVRV will enter a long-term downtrend, completely aligning with Bitcoin's historical 4-year cycle timing pattern.

However, according to this macro outlook, the overall signal being conveyed is a "soft landing + inflation retraction + gradual monetary policy easing."

Although the future is always unknown, if this scenario plays out, the 4-year cycle theory may indeed be broken, and Bitcoin may enter an "eternal bull market."

@qinbafrank

The logic behind the outperformance of US stocks within the high-level wide-range consolidation compared to cryptocurrencies is that the market as a whole is still subtly concerned about the future trajectory of inflation. The strength of US stocks lies in their strong fundamentals and accelerated AI, allowing US stocks to withstand the ongoing worries about inflation trends. Cryptocurrencies rely on capital and expectations to drive prices, and concerns about macroeconomic factors can affect the speed of external capital flow.

The current deeper level of the cryptocurrency market involves traditional capital inflow from ETFs and publicly traded companies as buyers, ancient whales, and trend investment swing profit-taking as sellers. The vast majority of market price fluctuations and volatility stem from the interplay of these two forces. In the short term, the strength of the economy, inflation trends, and interest rate expectations will all impact the speed of capital inflow from buyers. A positive outlook accelerates capital inflow speed, while a worsening outlook halts inflows or even leads to outflows.

Currently, the Fed is returning to rate cuts, but inflation is slowly rising. The market naturally worries that Fed rate cuts may be interrupted by inflation once again, impacting buyer capital inflow, as evident from changes in ETF net inflows. The core theme of the US stock market, AI penetration rate, is about to reach 10%. Once this threshold is crossed, it will enter a rapid penetration rate increase period, as previously mentioned, where AI is accelerating at an accelerating pace. It is from this perspective that the relative strength is naturally reflected.

The future market trend will depend on macroeconomic data:

1) Best-case scenario: Inflation rises at a pace and magnitude lower than expected, benefiting both cryptocurrencies and US stocks.

2) Medium scenario: Inflation pace meets expectations, more favorable to US stocks due to their stronger fundamentals. Cryptocurrencies may fare relatively well, but are likely to experience high-level wide-range consolidation.

3) Worst-case scenario: A future instance of inflation significantly exceeding expectations, causing both US stocks and the cryptocurrency market to pull back. US stocks may experience a minor setback, while the cryptocurrency market suffers a moderate one.

@WeissCrypto

The impact of the Fed rate cut on liquidity in the crypto market may not be felt until mid-December. Their model indicates that sideways volatility may persist for 30 to 60 days, with a significant bottom possibly forming around October 17. It is worth noting that Weiss Crypto recently predicted a peak around September 20.

@joao_wedson

Joao Wedson, the founder of the blockchain analytics platform Alphractal, has stated that Bitcoin is showing clear signs of a cycle exhaustion. He points out that the on-chain realized profitability SOPR trend signal indicates that investors are buying at historical highs, while the profit margin has been shrinking. The actual price for short-term holders of Bitcoin is currently $111,400, a level institutional investors should have reached earlier. He also notes that compared to 2024, Bitcoin's Sharpe ratio, used to measure risk-adjusted return, has weakened.

He suggests that "those who bought BTC at the end of 2022 are satisfied with a +600% return, but those accumulating in 2025 should reconsider their strategy," while market makers tend to sell BTC and buy altcoins, as altcoins will outperform in the future.

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