The following conditions need to be met for a crypto bull market to begin:
1. The United States stopped raising interest rates, started to introduce interest rate cut policies, and gave specific time points for interest rate cuts!
There is no bull market when interest rates are raised. Only when the market is flooded with funds can bubbles occur in the risk market and cryptocurrencies can have strong financial pulls. What is certain is that the United States will most likely stop raising interest rates in 2023, but it is basically impossible to start cutting interest rates in 2023. After suspending interest rate increases, the high interest rate policy will be maintained for at least half a year, that is, until 24 Mid.
2. Inflation in beautiful countries drops to less than 2%
2023 is still far from this goal. We can only say that inflation has begun to decline. Xuan Ji predicts that the goal will not be achieved until the middle and late 2024. It is very likely that long-term high interest rates will be maintained in 2024. Even if the interest rate hikes are stopped, monetary policy will still be mainly tight! Pay close attention to the unemployment rate and the trend of US stocks!
3. The unemployment rate in the United States needs to be further improved
By tightening the pace of economic expansion and reducing income, consumption power will decline, and the progress of reducing inflation can be accelerated. At the same time, we can see that the U.S. stock market has been rising recently, which indirectly reflects that the U.S. economy is still strong and capital expectations for the U.S. economy are still optimistic. We must remember that the stock market is a response to expectations of the country's economy. If it is not optimistic about the economy, it will be difficult for the stock market to rise!
Some people may ask, what is the relationship between the cryptocurrency bull market and the U.S. stock market?
Remember, as long as the stock market goes up, the U.S. economy is strong enough. If the economy continues to strengthen, the U.S. will only adopt a tightening monetary policy to prevent inflation and economic overheating, then lowering interest rates and flooding the money supply will not be possible.
Without a massive money injection, and with funds being continuously withdrawn from the market, how can the cryptocurrency market start a bull run? Can it be driven up by retail investors’ small investments?
If I have to predict how long the US will cut interest rates and start monetary easing, I estimate it will be in 25 years, which happens to be not far from the BTC halving time, so the bull market in the cryptocurrency market will probably have to wait until the end of 24 or the beginning of 25! $BTC $ETH
