Let's have a big discussion and chat about the script of US stocks and cryptocurrency trends in this round of the Federal Reserve's interest rate cut cycle. (Note: This is just one possibility, a probability game, for entertainment purposes only)

In this round of the Federal Reserve's interest rate cut cycle, the long-term script for US stocks and cryptocurrency is clear to see, with the core logic hidden in liquidity and market games.

First, let's talk about US stocks. Currently, preventive interest rate cuts are continuously advancing, and with the Federal Reserve set to restart short-term Treasury bond repurchases in January 2026 and officially stop balance sheet reduction, this is essentially implicit QE. Although it is not publicly acknowledged, it can indeed marginally improve liquidity. Additionally, there are expectations of easing with the new Federal Reserve chair coming into office.

Drawn by hand, not very detailed, just bearable to look at.

However, the trend will not be smooth sailing. There is a high probability of small pullbacks along the way, but overall it will still slowly grind upwards until a potential crisis breaks out—this point will be left as a foreshadowing, and will be slowly unraveled later.

Currently, U.S. stocks are at a high position, and the accumulation of leverage continues to brew risks. The Federal Reserve needs to move towards a low-interest rate area and truly start QE. It requires a reasonable head, whether it is the fermentation of recession expectations, a sudden black swan, or the burst of the AI bubble. Sooner or later, it will trigger a wave of violent deleveraging. A prolonged rise at high levels must meet a deep washout, which is an inevitable result of the market's long and short game. The harvesting market will come eventually.

Looking at crypto again, this recent wave of U.S. stocks has reached new highs, but the snail has shown a flamboyant independent market, going down without going up...

The current fatigue is obvious, and there is a high probability of forming a head and shoulders or slanting top structure in the future. It is difficult to directly rush to 150,000 or 200,000 due to insufficient support. As of today, all the positive news about crypto has been realized, with the ETF being recognized by Americans. Next, we need to hand in the paper, which will take time to brew the next round of a big market.

As interest rate cuts progress, it may slowly be pushed up to 100,000, or even touch 120,000, but I tend to be bearish on the future market. Even if there is no pullback and it continues to be a bull market, I will not be interested. Entering at such high levels is not even worth considering.

There will definitely be another wave of fierce bullish market in the future, and the bulls will inevitably face a severe blow again. Right now, the circle is bluffing that crypto will break away from the four-year cycle and start a big cycle. I don't quite agree. Even if a big cycle is really to be launched, it must first experience a deep crash washout like the one on March 12, 2020, to completely clear out the leverage. A big rally must first have a big drop.

Currently, whether in U.S. stocks or crypto, both are in an awkward range that is neither up nor down. Non-professional traders don’t need to struggle every day with short-term fluctuations. Going back and forth is all ineffective games, purely self-inflicted difficulties.

Just do what you should do in daily life, don’t enter the market during a non-crash, wait for the violent deleveraging and deep crash that kills the bulls to come. Only when panic emotions are at their peak and the chips are cleared will it be a high-probability entry opportunity. Avoiding the choppy chaotic period will help you step less into pitfalls and catch real opportunities.

Note, the judgment of the market situation should pay attention to timeliness, based on the latest.

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Note: Investment carries risks. Use your own brain to think it through, make your own decisions, and take responsibility for yourself. My information is just one person's opinion and is for reference only.

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