Can we expect a rate cut in September? The ultimate indicator for deciphering Bitcoin prices.

Recently, are you struggling with the Federal Reserve Board of Governors (FRB)'s interest rate cut issue in September? Here are some important points to understand market trends:

The Federal Reserve Board of Governors' Stance and Market Perspective

Message from FRB Officials: "September may be too early"

Several officials from The Federal Reserve Board of Governors have recently shown a cautious stance regarding a rate cut in September. The message has been consistent: "We need to wait and see a little longer."

On the other hand, the market has an opposing view

Looking at the movements in the interest rate futures market, the proportion of investors predicting a rate cut in September significantly exceeds those predicting no rate cut.

Why does the market have a different view from the Federal Reserve Board of Governors?

The key point is the employment data. The recently released employment statistics are not favorable. The number of job seekers is increasing, while the number of job openings is rapidly decreasing. This situation may lead the Federal Reserve Board of Governors to consider interest rate cuts to support the economy. If the labor market collapses, the responsibility will be significant.

However, recent data has been somewhat unstable and does not indicate a clear direction. This has been causing the volatility in Bitcoin prices and the sharp movements up and down.

Is there a way to accurately predict the price of Bitcoin?

In fact, there is a fundamental indicator that predicts the movement of Bitcoin prices:

Fluctuations in Global Money Supply (M2)

This relationship is very clear:

• If the money supply expands, the price of Bitcoin will rise
• If the expansion of the money supply slows down or shrinks, the price of Bitcoin will fall

However, Bitcoin's reaction typically tends to be 1 to 2 months delayed from changes in the money supply. It's like turning on the fire before the water boils.

Historical Evidence

During the pandemic of 2020 As a result of central banks around the world supplying a large amount of funds to the market, Bitcoin reached approximately $70,000 in 2021.

Tightening period of 2022 When the Federal Reserve Board of Governors reduces the money supply, Bitcoin has fallen to $16,000.

History clearly teaches us that when the money supply (water level) rises, Bitcoin (ship) also rises.

Current Currency Supply Situation

In the first half of this year, the global money supply had been steadily expanding. However, recently that momentum has slowed, and it is now almost flat or slightly contracting (although the extent of the contraction is not significant).

What does this mean?

Short-term outlook: It is not realistic to expect a sudden rise in prices. This unstable market situation is likely to continue for a while.

Conditions for the Next Major Bull Market: It is necessary for the major central banks of the world, particularly the Federal Reserve Board of Governors, to expand the supply of funds again. Specifically, this means either starting to cut interest rates or implementing new economic stimulus measures.

Proposal for Investment Strategy

1. Do not chase highs in the current market: The risk of buying at a high price is significant in an unstable market.

2. During a sharp decline (especially near important support lines): It may be worth considering a dollar-cost averaging strategy to gradually purchase the underlying asset.

3. The most important quality is patience: In the current market environment, having a long-term perspective is the key to success.

Professional Perspective

Beginners tend to feel anxious when looking at charts, but professional investors pay attention to the trends in currency supply. By understanding this fundamental relationship, you will be able to judge market movements more calmly.

In conclusion:

1. Possibility of Rate Cut in September: There is a possibility due to the worsening employment statistics, but it is not certain based on the statements from the Fed officials.

2. Conditions for Bitcoin to Break Free from Stagnation: It is necessary for the "global money supply" to expand again.

3. Caution is Important in Investment: It is wise to make investment decisions with a long-term perspective, without being overly affected by the fluctuations of the market.